<SUBMISSION>
<ACCESSION-NUMBER>0001104659-06-056771
<TYPE>8-K/A
<PUBLIC-DOCUMENT-COUNT>2
<PERIOD>20060817
<ITEMS>2.02
<ITEMS>9.01
<FILING-DATE>20060823
<DATE-OF-FILING-DATE-CHANGE>20060823
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>BEBE STORES INC
<CIK>0001059272
<ASSIGNED-SIC>2330
<IRS-NUMBER>942450490
<STATE-OF-INCORPORATION>CA
<FISCAL-YEAR-END>0702
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K/A
<ACT>34
<FILE-NUMBER>000-24395
<FILM-NUMBER>061051604
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>400 VALLEY DR
<CITY>BRISBANE
<STATE>CA
<ZIP>94005
<PHONE>4157153900
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>400 VALLEY DR
<CITY>BRISBANE
<STATE>CA
<ZIP>94005
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>BABE INC
<DATE-CHANGED>19980407
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>8-K/A
<SEQUENCE>1
<FILENAME>a06-18445_18ka.htm
<DESCRIPTION>CURRENT REPORT OF MATERIAL EVENTS OR CORPORATE CHANGES
<TEXT>
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<head>






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<body lang="EN-US">

<div style="font-family:Times New Roman;">
 <div style="border:none;border-top:double windowtext 6.0pt;padding:0pt 0pt 0pt 0pt;"> <p style="border:none;margin:0pt 0pt .0001pt;padding:0pt;"><a name="scotch"></a></p> </div>

<p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">UNITED STATES SECURITIES AND EXCHANGE COMMISSION</font></b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Washington, D.C. 20549</font></b></p>

<div style="line-height:normal;margin:0pt 0pt 12.0pt;text-align:center;"><hr size="1" width="160" noshade color="black" align="center" style="width:120.0pt;"></div>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">Form&nbsp;8-K/A</font></b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><b><font size="3" face="Times New Roman" style="font-size:12.0pt;font-weight:bold;">CURRENT REPORT<br>
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</font></b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Date
of report (date of earliest event reported):<br>
<b><font style="font-weight:bold;">August 17</font>, 2006</b></font></p>

<p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">bebe
stores, inc.</font></b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Exact
name of registrant as specified in its charter) </font></p>

<div align="center">

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:31.42%;">
  <p align="center" style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-align:center;"><!-- SET mrlNoTableShading --><b>California</b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:2.88%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:31.42%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">0-24395</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:2.88%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:31.42%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">94-2450490</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:31.42%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(State or other
  jurisdiction of</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:2.88%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:31.42%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Commission File
  No.)</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:2.88%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:31.42%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(I.R.S. Employer
  Identification</font></p>
  </td>
 </tr>
 <tr>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:31.42%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">incorporation)</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:2.88%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:31.42%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:2.88%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:31.42%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">No.)</font></p>
  </td>
 </tr>
</table>

</div>

<p align="center" style="margin:12.0pt 0pt .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">400
Valley Drive</font></b></p>

<p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Brisbane,
CA 94005</font></b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Address
of principal executive offices)</font></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Registrant&#146;s
telephone number, including area code:<br>
<b>(415) 715-3900</b></font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Check the appropriate box below if the Form 8-K filing
is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):</font></p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font>
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)</p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font>
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)</p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font>
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))</p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font>
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))</p>


 <div style="border:none;border-bottom:double windowtext 6.0pt;padding:0pt 0pt 0pt 0pt;"> <p style="border:none;margin:0pt 0pt .0001pt;padding:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p> </div>
</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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<div style="font-family:Times New Roman;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>

<p style="margin:0pt 0pt 12.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item&nbsp;2.02
Results of Operations and Financial Condition</font></b></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The information in this
Form 8-K is being furnished pursuant to Item&nbsp;7.01 and shall not be deemed
to be &#147;filed&#148; for purposes of Section&nbsp;18 of the Securities Exchange Act of
1934 (the &#147;Exchange Act&#148;) or otherwise subject to the liabilities of that
section, nor shall it be deemed to be incorporated by reference in any filing
under the Securities Act of 1933 or the Exchange Act. This report will not be
deemed an admission as to the materiality of any information herein.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On August 17, 2006, bebe
stores, inc. hosted a previously announced conference call to discuss fourth
quarter fiscal 2006 financial results and to provide first quarter fiscal 2007
guidance.&#160; The transcript of the conference
call is furnished herewith as Exhibit 99.1.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item
9.01 Financial Statements and Exhibits.</font></b></p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-indent:0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(d)</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b>Exhibits</p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt 38.0pt;text-indent:-10.0pt;"><!-- SET mrlNoTableShading -->99.1</p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Transcript of bebe stores, inc. August 17, 2006
  conference call.</font></p>
  </td>
 </tr>
</table>

<p align="center" style="margin:24.0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SIGNATURE</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="100%" colspan="3" valign="top" style="padding:0pt .7pt 0pt 0pt;width:100.0%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading -->Date:&nbsp;&nbsp;&nbsp;August 23, 2006</p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="100%" colspan="3" valign="top" style="padding:0pt .7pt 0pt 0pt;width:100.0%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="50%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:50.64%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="49%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.36%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">bebe stores, inc.</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="50%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:50.64%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="49%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.36%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="50%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:50.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="41%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:41.7%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ Walter Parks</font></p>
  </td>
  <td width="7%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:7.66%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="50%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:50.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="49%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.36%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="50%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:50.64%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="49%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.36%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Walter Parks, Chief Financial Officer</font></b></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;"><font face="Times New Roman">2</font></p>
</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>a06-18445_1ex99d1.htm
<DESCRIPTION>EX-99
<TEXT>
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<body lang="EN-US">

<div>
 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>

<p align="right" style="line-height:normal;margin:0pt 0pt 12.0pt 72.0pt;text-align:right;text-indent:-72.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit
99.1</font></b></p>

<p style="line-height:normal;margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Welcome to bebe stores &#147;2006 4th Quarter
Earnings Release conference call. &#160;As a
reminder, this call is being recorded.&#160;
We will begin with the Company&#146;s disclosure statement:</font></p>

<p style="line-height:normal;margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;During the course of this conference call, we
will make projections and other forward-looking statements regarding future
events and the future financial performance of the company. &#160;We wish to caution you that such statements
are just predictions and that actual events or results may differ
materially.&#160; We refer you to the
company&#146;s Forms 10K, 10Q and other filings made with the SEC for additional
information on risk factors that could cause actual results to differ
materially from our current expectations.&#148;</font></p>

<p style="line-height:normal;margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Now I would like to introduce bebe&#146;s CEO, Mr.
Greg Scott.</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading -->Greg Scott:</p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Good afternoon and thank you for joining me today
  for bebe&#146;s fourth quarter fiscal 2006 conference call. With me today is
  Walter Parks, bebe&#146;s CFO. Today&#146;s call will be limited in time to one hour.
  After our prepared comments, we will take questions for as long as time
  permits.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Let me start by saying that I was pleased with our
  performance this quarter and fiscal year. The fourth quarter was especially
  successful when compared to the prior year fourth quarter. Diluted earnings
  per share increased 14% this quarter on top of a 133% increase in the same
  period of the prior year, driven by an operating margin of 19%, which is an
  impressive number. Each month during the quarter comparable store sales were
  positive when compared to the prior year and we were very pleased with the
  May catalog results, the June&#146;s &#147;bebe&#146;s got it&#148; promotion and our wear-now
  strategy.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Before reviewing the quarter results, I would like
  to express my thanks and congratulate all of the bebe associates that have
  contributed to our 40 consecutive months of positive comparable store sales
  increases beginning April 2003 and continuing through July 2006.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Had stock based compensation been recorded in the
  prior year, the impact to diluted earnings per share would have been
  approximately $0.02 per share as previously disclosed. After taking this
  charge into account, diluted earnings per share would have been $0.19 and the
  increase in diluted earnings per share from the fourth quarter of fiscal 2005
  to the fourth quarter of fiscal 2006 would have been approximately 26%.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net sales for the quarter were $152 million dollars
  on a comp store sales increase of 3.5%. Net sales increased 11% compared to
  the same period of the prior year.</font></p>
  </td>
 </tr>
</table>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Walter will take you through the details of the
  fourth quarter; I will then review some of the highlights of our business. We
  will then discuss our plans for the upcoming year and quarter. After that, we
  will be happy to take your questions.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Walter Parks:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank you Greg, and good afternoon.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As Greg reported, net sales for the fourth quarter
  increased 11% to $152 million, compared to sales of $137 million in the
  fourth quarter a year ago. Same store sales for the fourth quarter increased
  3.5% compared to an increase of 34% in the prior year.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For the fourth quarter of fiscal 2006 comparable
  store average dollar sale increased approximately 4%, units per transaction
  increased approximately 1% and average transactions were approximately flat
  with the prior year.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gross margin decreased to 50.5% from 51.0% in the
  prior year. This decrease of 0.5% was primarily due to higher occupancy
  expense.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">SG&amp;A expenses were 31.5% of sales for the
  quarter compared to 29.5% in the same period of the prior year. This increase
  in SG&amp;A expenses as a percent of net sales is primarily due to a $2.8
  million pre-tax charge, or 1.8% of net sales, related to both the expensing
  of stock based compensation and a negotiated legal settlement. This increase
  in SG&amp;A is also due to an increase in advertising expenses offset by
  lower compensation expense and a lower variable expense.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The effective tax rate for the fourth quarter of
  fiscal 2006 decreased to 31.4% from 37.8% in the fourth quarter of fiscal 2005
  primarily due to an increase in tax exempt interest income and a cumulative
  adjustment of temporary and permanent differences offset by compensation
  expense associated with expensing incentive stock options. The effective tax
  rate is expected to fluctuate from quarter to quarter under SFAS 123(R).</font></p>
  </td>
 </tr>
</table>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net earnings for the fourth quarter were $22.1
  million vs. $19.5 million in the prior year.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Diluted earnings per share for the fourth quarter of
  fiscal 2006 increased 14% to $0.2 per share on 93.8 million weighted average
  shares outstanding compared to $0.21 per share on 94.9 million weighted
  average shares outstanding for the fourth quarter of fiscal 2005. Fiscal 2006
  results include the impact of $0.02 per share related to both the expensing
  of stock based compensation and the previously disclosed negotiated legal
  settlement.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our total cash and investments at July 1, 2006 were
  $328 million versus $271 million at July 2, 2005.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Inventories at July 1, 2006 were $42 million
  compared to $32 million at July 2, 2005. At the end of the fourth quarter,
  finished goods inventory per square foot, was approximately 12% greater than
  the prior year.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Capital expenditures for the fiscal year were
  approximately $31 million and depreciation expense for the fiscal year was
  $16 million.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We ended the fourth quarter with 242 stores which
  represent 881,000 square feet.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Now, I&#146;ll turn the call back over to Greg.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Greg Scott:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thanks, Walter.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.92%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Results for the fourth quarter 2006 speak to the
  continued strength of the bebe brand as we have anniversaried positive
  comparable store sales growth in the fourth quarter for the past three years.
  During the fourth quarter of fiscal 2005, we achieved a 34% comp store
  increase and a 133% increase in diluted EPS. This was on top of a 9% comp
  store increase in the fourth quarter of 2004 and a 3% comp store increase in
  the fourth quarter of 2003.</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 72.0pt;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>Dresses,
collection sportswear and woven tops were successful comp categories for us
this quarter.&#160; We were very pleased with
these categories which are in line with our fashion direction to continue to
focus on a more sophisticated offering.&#160;
We think these departments will be important this fall</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 72.0pt;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>During
the quarter, we spent 3.7% of sales on advertising versus 2.7% in the prior
year.&#160; This increase is primarily due to
increases in print advertising and ongoing costs associated with our loyalty
program.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 72.0pt;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>We
are currently completing a strategic review of our advertising expenditures for
2007 and will provide an update of our fiscal 2007 plans during our first
quarter earnings release conference call.&#160;
Currently we believe that fiscal 2007 total advertising expense will be
below fiscal 2006 as a percent of sales.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 72.0pt;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>bebe.com
sales for the fourth quarter and fiscal 2006 increased 12% and 22% respectively
over the prior year. &#160;This quarter we
launched dedicated store fronts for BEBE SPORT and our accessory concept.&#160; We have expanded our suiting presentation and
launched pre-order exclusive to our clubbebe members.&#160; These efforts will continue to build bebe.com
as a source of brand strength, communication and brand experience with our
clients.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 72.0pt;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>We
have been very pleased with the customer response to our loyalty program, clubbebe.&#160; clubbebe launched in Q2 to all locations. &#160;At year end approximately 1 million clients
signed up for the program&#151;exceeding our expectations. As a result, we
successfully increased both circulation and response to our catalogs.&#160; Our May catalog, supported by our clubbebe
member list, broke new records in our direct mail initiatives.</p>

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<p style="margin:0pt 0pt 12.0pt 72.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our catalogs continue to
be a successful strategy to speak to the key looks for the season and drive
increased spending with our loyal customers.&#160;
In 2007, we will increase our direct circulation by more than 35% and we
have added an additional Holiday gift giving book in December.</font></p>

<p style="margin:0pt 0pt 12.0pt 72.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In fiscal 2007, we are working on the following
initiatives as we put into place the foundation to achieve our goal of becoming
a billion dollar brand.&#160; These
initiatives include a specific focus on current category opportunities, brand
extensions, new store openings, direct to consumer initiatives, and
international expansion.</font></p>

<p style="margin:0pt 0pt 12.0pt 90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Going through them:</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 90.0pt;text-indent:-27.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>For
the fall of fiscal 2007, bebe retail will focus on Collection, Separates,
Dresses and Tops.&#160; This is consistent
with the spring selling season and our go forward fashion trends.&#160; We believe the success in these departments
will be offset by weakness in our casual and denim categories.&#160; As we discussed on our last call we will offer
COLLECTION bebe, our Runway Collection, in 20 of our stores beginning in the
middle September.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 90.0pt;text-indent:-27.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our
accessory business was disappointing this spring, but we continue to believe it
is a growth category for our business.&#160; I
am happy to report we have already seen a turn around in Accessories in August,
and are now beating expectations.&#160; This
Holiday we will introduce watches, offer new sunglasses and roll out a holiday
gift giving strategy during the second quarter.</p>

<p style="margin:0pt 0pt 12.0pt 90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In shoes, we have retained additional design talent to
take advantage of the opportunity to offer better styling, fabrication and
assortment.</font></p>

<p style="margin:0pt 0pt 12.0pt 90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We continue to be pleased with the results in our
stores that offer a side by side accessory shopping experience.&#160; We are pleased with the results to date in
stores that we added accessory entrances such as Lenox Square, Fashion Show</font></p>

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<p style="margin:0pt 0pt 12.0pt 90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">and Rodeo Drive, and dedicated accessory sections in
San Francisco Centre, Century City and Queen&#146;s Center. We currently anticipate
expanding our locations in both King of Prussia outside of Philadelphia and
Valley Fair in Santa Clara to include a separate entrance for accessories, and we
are opening a new location on Oak Street in Chicago similar to our location on
Rodeo Drive.</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 90.0pt;text-indent:-27.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The
BEBE SPORT performance this spring trailed the company.&#160; We believe this was due to a merchandise miss
in key fabric classifications and the customer&#146;s lack of acceptance of the
trends that we have identified.&#160; In
addition, we did not anniversary last springs direct mail catalog which drove
traffic to our stores.</p>

<p style="margin:0pt 0pt 12.0pt 90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We are now focusing on creating a clear story that
delineates and establishes BEBE SPORT as a destination for performance and
active lifestyle needs.&#160; We will focus on
three categories of business; Active, Street and Accessories and introduce a
fourth category - yoga/health.&#160; We will
introduce yoga/health to meet the needs of this growing customer.&#160; We will deliver on the promise: BEBE SPORT
where sexy fashion works out!</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 90.0pt;text-indent:-27.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>In
addition to category opportunities, we continue to believe that new store
growth will be a very important part of our long-term growth strategy.&#160; Expansion of existing stores with very high
sales per square foot will also be part of our square footage growth story in
the coming fiscal years.</p>

<p style="margin:0pt 0pt 12.0pt 90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In fiscal 2007, we currently anticipate opening 50 new
stores, including: 28 bebe stores, 21 BEBE SPORT stores and 1 Neda store.&#160;&#160; We also anticipate</font></p>

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<p style="margin:0pt 0pt 12.0pt 90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">renovating 12 locations and expanding or relocating 9
locations.&#160; This will represent
approximately 18% square footage growth over fiscal 2006.</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We currently are planning to open the first Neda store
on September 28</font><font size="1" style="font-size:6.5pt;position:relative;top:-3.0pt;">th</font>&#160;on Market Street as part of the grand opening
of the expanded San Francisco Center.&#160;
This boutique concept will feature 70% shoes the majority imported from
Italy with average price points of $400 sourced from a collaboration of
designers and including both branded and private label.&#160; We will also offer fine leather goods and
gift items to round out the assortment.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 90.0pt;text-indent:-27.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>We
are very pleased with our direct to consumer business which includes:&#160; bebe.com, clubbebe and direct mail.&#160; bebe.com has more functionality than its
previous platform and this year we will introduce additional functionality such
as targeted content, promotional messaging with check out and preorders.</p>

<p style="margin:0pt 0pt 12.0pt 90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">clubbebe now has approximately 1 million clients
within our database which represents approximately 30% more names than the same
time last year.&#160; This improvement in the
quantity and quality of the names has contributed to a significant improvement
in the performance of the direct mail business.</font></p>

<p style="margin:0pt 0pt 12.0pt 90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As I reviewed earlier, we attribute our strong
performance from the May book to the improvement in our mailing list.&#160; We anticipate as we go forward there will be
a continued improvement in our mailing list which will positively impact the
customer&#146;s response to the catalog.</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 90.0pt;text-indent:-27.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>For
fiscal 2007 and beyond, we have a number of strategic investments supported by
key strategies to assure operational excellence in our stores.&#160; Our objective is to improve the selling
environment with improved floor coverage by investing new store hours offset,
to some extent, by reducing the non-selling hours.&#160; To do this, we are providing each store with
interactive training</p>

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<p style="margin:0pt 0pt 12.0pt 90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">material the rollout of
which is currently taking place in our stores.&#160;
This will be the first of several training initiatives as we continue to
believe long term success at the store level starts with a trained organization.&#160; We have also started eliminating non-selling
hours related to manual tasks and are currently evaluating software solutions
to help us schedule hours and report associate and inventory performance by
store.</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 90.0pt;text-indent:-27.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>In
store planning, we have several initiatives that will be implemented this year,
including: localization, sizing and Arthur planning utilization.&#160; Arthur planning was fully implemented in July
and we currently anticipate the weekly, monthly and seasonal process will take
much less time and the level of accuracy will improve.&#160; One of our goals this year was to develop the
ability to allocate and distribute based on customer demand in specific markets
such as cold weather or spring break stores.&#160;
Same for sizing, by measuring the size that is selling across all
categories in full price sales, we are then better able to address our selling
models which will allow us to improve planned purchases with the end result
being improved full price selling.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 90.0pt;text-indent:-27.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>To
support our growth we initiated a three year IS&amp;T strategic plan and we are
currently entering year two.&#160; In year one
we completed the upgrade of our infrastructure, began the implementation of the
new production management system, implemented Arthur planning, completed the
conversion of our web site to a third party platform and the roll out of club
bebe.&#160; We hope to go live with the first
phase of our production management system later this fall and be fully
operational in 12 months.&#160; For years two
and three, we have begun the process of identifying partners to replace our
current POS system and implement a new HRIS system.&#160; </p>

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<p style="margin:0pt 0pt .0001pt 90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 90.0pt;text-indent:-27.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>In
addition to our planning and IS&amp;T strategies, we have initiated several
sourcing strategies including partnering with our key suppliers to reduce costs
and lead times as well as increasing our international manufacturing while
maintaining speed to market.&#160; These
strategies have contributed to IMU improvement during the fourth quarter and we
believe they will contribute to IMU improvement this fall.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 90.0pt;text-indent:-27.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>As
of July 1, 2006, we operated 15 International locations through our licensees
in South East Asia, Israel and Greece.&#160;
Our recently renewed agreement with our South East Asia license expands
into the Middle East.&#160; In fiscal 2007, we
will expand from 15 to 19 stores, which include 7 openings and 3 closures. In
addition, our square footage will increase 180% from 10K to 28K square feet.&#160; This will include expansions in the UAE,
Indonesia and Malaysia as well as strengthen our position in Singapore and
Thailand.&#160; We will also close our Greek
locations.&#160; Our new and renovated
International stores are modeled after our flagship Rodeo Drive store and embrace
our most elevated in-store design.&#160; We
have implemented a new approach to our licensed business that ensures stores,
product offering and marketing are consistent with the bebe brand and further
support our global brand strategy.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 90.0pt;text-indent:-27.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">11.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>We
are currently planning an analyst&#146;s day in New York City on October 6, 2006 at
our new store opening in the Time Warner Center on Columbus Circle.&#160; The event will start at 8am and end before
the store&#146;s grand opening at 9:30am.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 90.0pt;text-indent:-27.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>This
September will be our 30<font size="1" style="font-size:6.5pt;position:relative;top:-3.0pt;">th</font>&#160;anniversary of our first store opening in
1976.&#160; In September, we will be
celebrating bebe&#146;s 30 years of sexy- serving the needs of the hip,
sophisticated, sexy and fashion-driven customer. This celebration will be</p>

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<p style="margin:0pt 0pt 12.0pt 90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">showcased after the Labor
Day holiday in our September catalog as well as in store windows.</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 90.0pt;text-indent:-27.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">13.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>The
guidance that Walter is going to provide is predicated on a successful
Semi-Annual Collection Preview event which is taking place tonight in all bebe
and BEBE SPORT stores, and a similar response in sell through in our September
catalog as we experienced in May.&#160; Both
of these events are important to the success of the quarter.&#160; We will report on the client event as part of
our August sales release and the September catalog as part of our quarter end
results.</p>

<p style="margin:0pt 0pt 12.0pt 54.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank you and I would
like to turn the call over to Walter.</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Walter Parks:</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Thank
you, Greg.</p>

<p style="margin:0pt 0pt 12.0pt 72.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As Greg reviewed, we are seeing the momentum from July
continue with our August business.&#160; Month
to date, we are trending to low double digits comp store sales and currently
anticipate comparable store sales for the first quarter to be in the low double
digit range.</font></p>

<p style="font-family:Times New Roman;font-style:italic;line-height:normal;margin:0pt 0pt 12.0pt 108.0pt;text-indent:-18.0pt;"><i><font size="2" face="Symbol" style="font-size:10.0pt;font-style:normal;">&#183;</font></i><font size="1" style="font-size:8.5pt;font-style:normal;">&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;font-style:normal;">Diluted
earnings per share should be in the range of $0.17 to $0.21 per share based on
94 million weighted average shares outstanding in the first quarter vs. $0.14 per
share based on 94 million weighted average shares outstanding in the first
quarter of fiscal 2006.</font></p>

<p style="font-family:Times New Roman;font-style:italic;line-height:normal;margin:0pt 0pt 12.0pt 108.0pt;text-indent:-18.0pt;"><i><font size="2" face="Symbol" style="font-size:10.0pt;font-style:normal;">&#183;</font></i><font size="1" style="font-size:8.5pt;font-style:normal;">&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;font-style:normal;">The
Company is currently anticipating an effective tax rate of 37% for the first
quarter of fiscal 2007.</font></p>

<p style="font-family:Times New Roman;font-style:italic;line-height:normal;margin:0pt 0pt 12.0pt 108.0pt;text-indent:-18.0pt;"><i><font size="2" face="Symbol" style="font-size:10.0pt;font-style:normal;">&#183;</font></i><font size="1" style="font-size:8.5pt;font-style:normal;">&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;font-style:normal;">Inventory
at the end of the quarter will increase over the prior year in the range of
high single digits to low double digits per square foot.</font></p>

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<p style="margin:0pt 0pt .0001pt 54.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="font-style:italic;line-height:normal;margin:0pt 0pt 12.0pt 18.0pt;text-indent:-18.0pt;"><i><font size="2" face="Symbol" style="font-size:10.0pt;font-style:normal;">&#183;</font></i><font size="1" style="font-size:8.5pt;font-style:normal;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font><font size="2" style="font-size:10.0pt;font-style:normal;">For fiscal 2007, the Company plans to open 50 stores, including 28
  bebe stores, 21 BEBE SPORT stores and 1 Neda store and close two stores, one
  in the fall and one in the spring season.</font></p>
  <p style="font-style:italic;line-height:normal;margin:0pt 0pt 12.0pt 18.0pt;text-indent:-18.0pt;"><i><font size="2" face="Symbol" style="font-size:10.0pt;font-style:normal;">&#183;</font></i><font size="1" style="font-size:8.5pt;font-style:normal;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font><font size="2" style="font-size:10.0pt;font-style:normal;">We currently plan to open 2 bebe stores, 5 BEBE SPORT stores and 1
  Neda store in the first quarter; 7 bebe stores and 6 BEBE SPORT stores in the
  second quarter; 7 bebe stores and 5 BEBE SPORT stores in the third quarter;
  and 12 bebe stores and 5 BEBE SPORT stores in the fourth quarter.</font></p>
  <p style="font-style:italic;line-height:normal;margin:0pt 0pt 12.0pt 18.0pt;text-indent:-18.0pt;"><i><font size="2" face="Symbol" style="font-size:10.0pt;font-style:normal;">&#183;</font></i><font size="1" style="font-size:8.5pt;font-style:normal;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font><font size="2" style="font-size:10.0pt;font-style:normal;">Capital expenditures for fiscal 2007 are planned at approximately $50
  million for new and expanded stores, IS&amp;T and office improvements.</font></p>
  <p style="font-style:italic;line-height:normal;margin:0pt 0pt 12.0pt 18.0pt;text-indent:-18.0pt;"><i><font size="2" face="Symbol" style="font-size:10.0pt;font-style:normal;">&#183;</font></i><font size="1" style="font-size:8.5pt;font-style:normal;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font><font size="2" style="font-size:10.0pt;font-style:normal;">Depreciation expense for the year will be approximately $18 million.</font></p>
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt 18.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:8.5pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font>Total square footage at the end of fiscal
  2007 is anticipated to be approximately 18% higher than fiscal year 2006 as
  Greg previously discussed.</p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Now Greg and I will be happy to answer your
  questions.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading -->Operator:</p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For those participants who have a question please
  press star, 1 on your touchtone phone. If your question has been asked prior
  to your turn please press star, 2 to remove yourself from the question queue.
  Please go off of your speakerphones to enter the queue.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our first question comes from the line of (Jeff Van Sinderen)
  with (B. Riley and Co.).</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt .0001pt 90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt 90.0pt;text-indent:-90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading -->(Jeff Van Sinderen):</p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Good afternoon and congratulations on a great
  quarter. I wonder if you can give us any insight in terms of your thoughts on
  the casual business and what might reignite that business in the future?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Well I would say that as we started probably early in
  January returning to a more sportswear driven business we started to see
  denim really decline as important to our business in early, you know, third
  quarter and then really start declining in fourth quarter.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">What we have found is the customer has just switched
  into a more sophisticated offering and, you know, denim and casual is just
  not important to her wardrobe at least from bebe today.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And I would suggest that if you look on the street
  in many cities across the United States the customer is perhaps wearing
  dresses as an alternative to the denim and casual that she would have worn a
  year ago. I think that it has, while there is still a casual need, I think
  she has just switched her uniform for today.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We obviously are working very hard as we head into
  the November, December period and especially the January period as we know
  those can be important periods for that category and we are working on it.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The bonus is though the customer has accepted
  suiting in a very strong way and she really has responded to a more dressed
  up, cleaned up look, which we really led with last fall also, which she
  wasn&#146;t ready for, but this year she is very ready for.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Jeff Van Sinderen):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay, great. And then Greg maybe - can you remind us
  what the key opportunities are or where the key opportunities are for
  improvement versus last year as you look at fall and holiday?</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt 12.0pt 90.0pt;text-indent:-90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt .0001pt 90.0pt;text-indent:-90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading -->Gregory Scott:</p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In terms of categories?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Jeff Van Sinderen):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yeah.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Well I think that, you know, and it goes every year
  certain categories popup and certain categories decline based on where the
  customer is. I think that one is accessories. We have already seen a huge
  improvement in our shoe and belt and jewelry business as we&#146;ve entered this
  new year.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">It really turned in the middle of July and we&#146;re
  excited about what she&#146;s seeing there and we just shot, you know, our holiday
  catalog and I&#146;m excited about that offering there. I think we still continue
  to have great opportunity in dresses as we become one of the real
  destinations for dresses. And dresses really take a big play in September and
  October in the business.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And I think that, as I said, you know, while she was
  wearing denim still last year and casual I think our suits, you know, our heritage
  is about suits, I think that is really offsetting that and will take the
  dollars from that.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I think SPORT had a great first and second quarter
  last year. We are working on ways to continue to improve the comp there. And
  the outlet business still remains strong for us and it&#146;s good margin, outlet
  business, you know, she&#146;s really responding to our bebe logo, regular priced
  denim and also our special cuts. And what we&#146;re finding is, you know, the
  casual business has not deteriorated in the outlet business yet.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Jeff Van Sinderen):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Interesting. And then you mentioned on the SPORT
  business you think that that&#146;s really just been a function of not executing
  as well on the assortment as maybe you might have.</font></p>
  </td>
 </tr>
</table>

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<p style="margin:0pt 0pt .0001pt 90.0pt;text-indent:-90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
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  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading -->Gregory Scott:</p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yeah. I mean I think that there has been a change in
  the customer. You know, the whole look of the hook up that everyone, or the
  two piece jacket pants, that everyone talked about actually when we launched
  the concept three or four years ago like when is it going to die, well that
  has really kind of gone away in her look. And we are finding our line BBSP,
  which is true active performance is what this customer has really identified
  with now.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And so what it is about now is really chasing into
  the active (cart about) business and really reducing the amount in our street
  business. You know, I would like to say that, you know, SPORT still performs
  at a very high dollar per square foot for, you know, a new concept. We&#146;ve
  always been happy with it and I think we&#146;re in one of those transitional, you
  know, fashion trends in SPORT where we are really having to adjust to the customer&#146;s
  needs right now.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Jeff Van Sinderen):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay fair enough. I&#146;ll let somebody else ask you
  questions. Thanks very much and good luck.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank you.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our next question comes from the line of (Chris Kim)
  with J.P. Morgan.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Chris Kim):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Hi, good afternoon. Great quarter guys.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank you.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Chris Kim):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Question for Walter. Could you talk a little about
  the merchandise margin trends in the fourth quarter? Is it safe to assume
  that they were flattish versus last year?</font></p>
  </td>
 </tr>
</table>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt .0001pt 90.0pt;text-indent:-90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading -->Walter Parks:</p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our merchandise margins were slightly up offset by
  slightly higher occupancy.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Chris Kim):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay. Okay and how should we think about that as we
  head into the first quarter now?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Walter Parks:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Well again I think it depends ultimately on comp
  sales and the full price sell through. Currently with the 17 to 21 cent
  guidance; higher interest income, as evidenced by the fourth quarter; and
  lower tax rate we would look for modest expansion on our operating profit
  line dependent upon where we ended up in the guidance between the 17 and the
  21 and wouldn&#146;t talk specifically to margin or SG&amp;A at this juncture.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Chris Kim):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay, okay. And Greg, I guess, could you talk about,
  you know, some of these new larger store formats, you know, with the
  side-by-side accessories how they&#146;re performing, what you&#146;re seeing in terms
  of, I guess, sales productivity versus the chain?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And maybe some commentary on the new stores that,
  about 25, that you have planned for bebe, core bebe, stores that you have
  planned for &#145;07 what the square footage plans for those are?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yeah. I mean, you know, it&#146;s very exciting what
  we&#146;ve done as a company being able to open side-by-side&#146;s larger formats. You
  know, we completed fashion show in Vegas this quarter, or this past quarter,
  and, you know, the sales are through the roof.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And it&#146;s interesting when we show the customer
  through picturing and store design that we&#146;re in the shoe and handbag
  business she responds instantaneously. From a store that couldn&#146;t sell shoes
  well to a store that should sell shoes like crazy it&#146;s a phenomenal thing to
  see.</font></p>
  </td>
 </tr>
</table>

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<p style="margin:0pt 0pt .0001pt 90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We will continue to, as
  I said, expand our productive stores into some of these formats as I said in
  Valley Fair and Santa Clara and in King of Prussia and we continue to look
  for other opportunities because we are finding this is a big part of our
  growth strategy taking these very high productive stores and expanding them.</font></p>
  <p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And, you know, it all
  started with Lenox last June, about a year ago June, where we took a store
  that was 20, approximately 2,800 square feet and grew to almost 6,800 &#150; 6,900
  square feet. You know, we were cautiously optimistic. Well the performance
  has blown away our expectations.</font></p>
  <p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And what I would like
  to say is I think if I look back in &#145;97 or &#145;96 when we had trouble filling a
  3,000 square foot store it really speaks to how the brand has grown and how
  the brand has extended.</font></p>
  <p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As we go into the 25
  stores that we&#146;ll open possibly in this first half, you know, I think that
  bebe will continue to be on average about 3,800 square feet, SPORT being on
  average about 2,500 square feet.</font></p>
  <p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">One of the - so that
  will continue to be an average, but as we did in Columbus Circle where we&#146;re
  taking the (Joseph), currently the (Joseph Abbaid) space, we&#146;re already in
  construction, you know, it&#146;s a two level store it&#146;s probably about 6,800 &#150;
  6,700 square feet.</font></p>
  <p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We believe this will be
  another one of our, hopefully, homerun stores where we&#146;re really able to show
  New York, and really the Northeast, what our product and what our company is
  all about.</font></p>
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As I say to the developers, you know, a lot of our
  analysts unfortunately don&#146;t get to see the power of bebe in the Northeast.
  If you go to our store, for</font></p>
  </td>
 </tr>
</table>

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<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">instance, in Garden State, almost an 8 - 9 year old
  store, 3,200 square feet, below the average, high, high productivity, but I
  don&#146;t believe the community is able to see what we&#146;re all about. I&#146;m happy
  with Columbus Circle. We&#146;re going to have a place for people to see what
  bebe&#146;s all about.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And I think Queens Center, I was there recently for
  a day, and I noticed that many analysts have been to the store already and
  they too are able to see what the store is all about. So we&#146;re excited about
  what the future brings for our new real estate.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Chris Kim):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay, great. And Walter a final question, any chance
  you could give us any color on the BEBE SPORT kind of breakdown versus, you
  know, the chain average in terms of...?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Walter Parks:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We haven&#146;t made that determination yet to provide
  that information.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Chris Kim):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">But it&#146;s safe to assume that things are still
  trending ahead of plan like they have been over the past couple of years?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Walter Parks:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Well I think that we wouldn&#146;t keep opening them if
  we weren&#146;t happy. And we continue to see our sales per square foot as a
  company increase.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Chris Kim):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay, fair enough. Best of luck with back half
  everyone.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank you.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our next question comes from the line of (Lauren
  Levitan) with SG Cowen and Company.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Lauren Levitan):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thanks, good afternoon. Greg I was wondering if you
  could talk about what you&#146;ve learned so far about your customer base through
  the clubbebe loyalty</font></p>
  </td>
 </tr>
</table>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">program? I know you&#146;ve said in the past that you&#146;ve
  been surprised by her activity, but have you learned anything new about her,
  you know, percent of spending that she does at bebe or her - or any
  differences in her age or lifestyle that you weren&#146;t aware of before?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And then separately with the increase in square
  footage for &#145;07 I&#146;m curious if you&#146;ve got any revised thoughts on alternate
  store based potential for bebe and for BEBE SPORT over the longer term.
  Thanks very much.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay. You know, your second question really speaks
  to our real estate strategy and whether, you know, we believe bebe has more
  opportunity. I still am holding up a number I think I throw out almost every
  call, 225 to 250 domestic U.S., not including Canada and Mexico. I do believe
  square footage growth though.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">You know, as I said I really believe in expanding
  these 2,700 square feet, 2,000 square foot stores, square foot stores to
  almost, you know, 5,000 to 6,000. So you&#146;re seeing square footage growth
  there not necessarily to the new units, but through expansion of our current
  highly productive units. I think SPORT continues to have opportunity to be
  over 250 stores. I&#146;m still holding really with that guidance.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In terms of the clubbebe customer and our customer I
  think, you know, what have I learned? I think I would say she is incredibly
  loyal to our brand. I think I&#146;ve always known that or felt that, but now in
  terms of when I can tell her or ask her to come in for an event or come shop
  with our catalog her response is dramatic.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And, you know, just by able to have clubbebe on the
  Web site and have a separate location where she can do preorders or get some
  fashion advice from</font></p>
  </td>
 </tr>
</table>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">our, you know, design team these are things that she
  wants because she believes bebe is her fashion authority.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And that&#146;s a very, you know, great thing for the
  company and it&#146;s something that we&#146;re very proud of and it&#146;s something that
  we want to take care of our client and we want to make sure we know that we
  really appreciate her and we hope we continue to surprise her.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I think in age we&#146;re really - currently we&#146;re
  actually doing a soft study on our database. We&#146;ll have a little more
  information on that, so I don&#146;t really have clear information on where the
  age has gone. I think, you know, subjectively, not objectively, I would say
  that it is getting slightly older currently and more affluent really
  basically because of our average dollar sale and really of our product
  offerings that are happening in the store today.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Lauren Levitan):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In terms of the increased circulation that you&#146;re
  targeting in &#145;07 is that to reach this clubbebe customer more frequently or
  is it a reaction to the fact that you just have a bigger database? And then
  also I&#146;m curious if you are at a point where you can think about the percent
  of sales over time that clubbebe might be able to represent?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yeah. I mean I think that the circulation is the two
  things you just said. It&#146;s, one, we are adding an additional book for
  holiday. Last year we had one book in November that kind of lasted maybe to
  the first week of December, but it was truly a November book. Because of the
  holiday selling period we are adding an additional book this year into
  December. So that&#146;s one part of the circulation.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And then obviously our customer base is growing. You
  know, as I said we have 30% at the end of the year more names that we can
  talk to and it&#146;s a cleaner name, a name that we know is a valid name. So yes
  our circ is</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">increasing. The December book that we will mail will
  be our all time high circulation. And I don&#146;t know, Walter, if we&#146;re even
  telling the number of what we&#146;re extending it to, but it is a large
  circulation number in December.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So I think that answers really the question on our
  circulation. You had one other question?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Lauren Levitan):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yeah and that was just in terms of, you know, I&#146;m
  trying to get a sense of how important the penetration of clubbebe currently
  is and might be over time. Have you thought about, you know, what percent of
  sales might be represented by this really rabid more loyal customer?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Right. Well I would say it is exceeding our
  expectations. I would say to anybody that really wants to find out go to our
  stores tonight and find out what percent of customers are going through that
  register that are clubbebe.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I think it&#146;s a very high number. I think it&#146;s higher
  than any of our objectives were. I don&#146;t think it is as high as per se the
  Chico&#146;s number, but it&#146;s much higher than we ever thought it would be,
  especially for a program that&#146;s really only almost a year old.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Lauren Levitan):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I&#146;ll see you in San Francisco Center. Thanks and
  good luck.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our next question comes from the line of (Lynn Walther)
  with Wachovia Securities.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Lynn Walther):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Hi, thanks. A couple of questions, I know you
  planned denim down this year I was hoping you could comment on whether it has
  played out as you thought or has it been a little bit softer?</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt .0001pt 90.0pt;text-indent:-90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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<br clear="all" style="page-break-before:always;">

<div>
 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>

<p style="margin:0pt 0pt .0001pt 90.0pt;text-indent:-90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading -->Gregory Scott:</p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Denim is incredibly soft. You know, I&#146;ll be - I&#146;m
  happy to say that we were predicting it. You know, we&#146;ve been kind of saying
  it for almost a year, so we were lucky in the sense, maybe lucky is not a -
  we were planful in the sense to say suiting is coming back. We started really
  targeting suiting last - or this past January to offset what was going to
  happen in denim.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And, you know, I&#146;ll say skinny jeans have not worked
  for our customer. Our customer loves fashion and she has probably an amazing
  body. She doesn&#146;t love skinny jeans. And that fashion trend has not worked
  though I&#146;ve seen most retailers really leading with skinny jeans. So it must
  be working elsewhere, but for our customer she has moved on to a
  sophisticated look and denim is really not part of her wardrobe right now.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Lynn Walther):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay. Thanks for that. And then in terms of the
  sourcing initiatives you mentioned, wondering if Walter could talk about the
  IMU improvement this quarter and also lack of leverage in occupancy on a 3.5%
  comp? What do we need to look for for leverage going forward?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Walter Parks:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Well I think the issue with the quarter is all the
  stores were backend loaded, so we took a lot of expense in the quarter
  without a lot of sales. So that skewed, pardon me, the results. As it relates
  to the IMU, again we wouldn&#146;t talk about what our IMU is, but it exceeded our
  expectations and I think it gave us the impetus to talk about it for this
  fall because actually, no, we don&#146;t usually go to that level of granular
  detail.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And I think when you&#146;re talking about leverage, I
  mean, yeah, 3.5% comp gives you some leverage, but it doesn&#146;t give you as
  much leverage as a 34% comp. And I, you know, I think that&#146;s kind of the
  point taken there.</font></p>
  </td>
 </tr>
</table>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>


<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes, 3.5% comp still gives us leverage. It&#146;s much
  more leverage than if we had a negative comp, but it doesn&#146;t give you as much
  leverage as last year or the prior year at a 34% comp. So I think that&#146;s also
  something to keep in mind when we speak to that.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Lynn Walther):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay. And then last question regarding SPORT. When
  do you think you&#146;ll be where you want to be in terms of the merchandise
  there, this sift you talk about with street and the more performance apparel?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I would say that like next spring I could really do
  an update and say where we are. I would say that we opened a store on Beverly
  Drive for SPORT in July where we really changed up the mix and changed up the
  look and feel of the store to really suggest it&#146;s a much more active store
  that focuses on being, you know, sexy fashion active. And we&#146;re much - we
  really are happy with that also.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">You know, and, you know, when we land exactly that
  assortment that we love, you know, I think you&#146;ll see it also in our
  marketing because we will put marketing behind it when we are completely
  satisfied we have the best news to tell our customer.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Lynn Walther):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay, thanks. Good luck.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our next question comes from the line of (Anne Poole)
  with (Kevin Dann and Partners).</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Anne Poole):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Hi. Can you discuss in some detail the evolution of
  your tops business? Have you seen a shift in how women are purchasing tops
  now that denim is not as relevant to her? Is she buying more outfits in your
  store and dressing kind of head-to-toe bebe?</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>


<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And I know tops last year during this time were a
  little bit of a trouble spot for you, so I was wondering what the key
  opportunities you see in this category for fall and holiday?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Well right now tops are very, very strong. I think
  we took the lead on an important category that people looked at us and
  thought we were crazy and I&#146;m not - I&#146;m just not going to say exactly what it
  is, but I noticed that people are now finally getting into that business.
  Tops have been great, fourth quarter they were great, they&#146;re great right
  now.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Honestly if you look at the total top complex
  sweaters is what is not as great, but I think that speaks to the casualness
  of certain sweaters. The sweater business, anything that relates to casual is
  not great right now, anything that&#146;s stressing sweaters is great.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So and the tops business is highly focused on our
  suiting and related separates business, both knit and woven. And we&#146;re seeing
  great strength there. And it&#146;s really more than offsetting what we&#146;re losing
  in sweaters today.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Anne Poole):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay. And then I recently noticed hosier in your
  stores and was wondering if there are any other product categories you plan
  to add to the assortment? I know you mentioned watches for holiday is there anything
  else that...?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yeah, hosiery is launching today for collection
  premiere. I think it will be a big category for this fall and holiday
  because, you know, if anybody&#146;s pulled out a magazine black tights, leggings,
  the whole thing are the pivotal piece to make a uniform current this season.
  You&#146;ve got to think though hosiery not a big business. I mean, yes, great
  fashion (unintelligible), but won&#146;t move the needle because it&#146;s, you know,
  low average unit retail, got to sell a lot of units.</font></p>
  </td>
 </tr>
</table>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">But watches on the other hand, which we&#146;re going to
  launch in our December catalog I think is going to be a great bonus to our
  business when we launch that in November, December period. Sunglasses will
  continue.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We have a great new collection we&#146;re going to
  feature in December. I think also what you&#146;ll start to see come October is
  that our shop and shop, meaning our more dedicated stores, about 15 to 18
  shoe and handbag stores, will also carry a small selection of the Neda shoe
  product.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And the reason that is is because to make minimum
  for one store out of Italy we needed to carry them in some of the bebe
  stores. So about 18 stores will also have the more higher priced Neda line in
  their stores and that will also add to the shoe comp business as we go into
  the second quarter.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Anne Poole):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay. And kind of, I guess, just in relation to the
  higher end product can you give some more details on the runway collection,
  preferably how many styles are going to be in that and what are the price
  points for that product?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The runway collection, as I said, will probably be
  at about 18 to 20 stores. I wont be exactly specific. It&#146;s - I don&#146;t have the
  skew list in front of me right now. I&#146;m going to defer that. It&#146;s not a large
  assortment.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">It will be very small in terms of the style maybe
  will only have four sizes of a style, or six sizes of a style. Jackets will
  run about average $500 to $600, outerwear will run over $1,000, pants will
  run from about, I think it&#146;s $298 to $398, skirts, $298, dresses in the $400
  to $500.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So it really will be that tip of designer price
  point, still not designer. We all know designer is much more expensive than
  that, but it will be very much tipping into that range. And we will launch it
  with parties in our store; we will have the collection running.</font></p>
  </td>
 </tr>
</table>

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<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So it will be a very interesting to see the
  response. Now you&#146;ve got to understand we&#146;re putting it in 18 doors that
  pretty much can sell a lot because, you know, you&#146;re in, you know, Vegas or
  you&#146;re in Beverly Hills, you&#146;re in some of the better locations across the
  country where typically price is not the issue look is.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So we&#146;re excited to see what that will represent. We
  also had a bonus that our COLLECTION bebe designer has designed some holiday
  dresses for Mischa Barton that we&#146;ll be showing in our holiday red carpet ad
  campaign and these dresses will be higher priced and they actually go into
  all bebe doors and they will not be, obviously, in the $500 range, but they
  will be bebe black label, not COLLECTION bebe, and we&#146;re excited about that
  also.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Anne Poole):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sounds good. Thank you.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our next question comes from the line of (Adrienne
  Tennant) with Friedman Billings Ramsey.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Adrienne Tennant):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Good afternoon. Congratulations on a great quarter.
  Job well done. Basically the first question I have is, again, on the runway
  collection. How many square feet approximately do you think that would be and
  how are you going to showcase it in the store with additional signage, etc.?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And then if you can talk about the Neda concept. Can
  you talk about what percent will be private label versus branded and what&#146;s
  the difference in the IMU there? And then finally if you can talk about
  sourcing. Just how much sourcing do you do domestically now and where do you
  want to take that? Thank you.</font></p>
  </td>
 </tr>
</table>

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<p style="margin:0pt 0pt .0001pt 90.0pt;text-indent:-90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading -->Gregory Scott:</p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay. So we have a lot of questions. So COLLECTION
  bebe, in the stores it will represent anywhere from 8 linear feet to 16
  linear feet meaning 1 to 2 bays in our store. It will be positioned in a pod
  point in our store meaning not probably in the front of the store unless
  there&#146;s a dedicated area, but more as part of the store where there is a
  clear separation from the bebe line and the COLLECTION bebe line. There will
  be COLLECTION bebe signage that we&#146;ve developed that will be above that and
  we&#146;ll also be playing the runway.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So and it will be also merchandise on exclusive COLLECTION
  bebe hangers, which are different than the bebe hangers. So and there will
  probably be one to two of an item out on the floor versus the typical six to
  eight of bebe. So it will have a definitely different feel and look than the
  bebe collection how we merchandise it.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Neda by bebe private label versus branded I
  would say we&#146;re probably, and this is off the cuff, about 80% branded, maybe
  85% branded, we&#146;re only bringing in in shoes one, two, three, about four
  private, I mean, I&#146;m sorry, I mixed that up, about 80% will be private label
  meaning Neda branded and then 20% will be branded from other labels. So I
  just want to make that clear. Neda will really be the impetus or the bulk of
  the assortment.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And really, as you know, the Neda product will have
  a better IMU than the branded product. But I think the branded product that
  we&#146;re bringing in is small exclusive designers to add a kind of a buzz to the
  Neda store.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In terms of sourcing, we continue to (in shop) our
  sourcing in the Far East and that has a lot to do with that we continue to
  get a little better IMU.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I mean our Merchant Team and our Production Team are
  doing an amazing job at working together to get the IMU up. And as Walter
  spoke to we saw some leverage on the IMU in Q4 and we&#146;re seeing it in Q1. And
  I have to</font></p>
  </td>
 </tr>
</table>

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<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.72%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">congratulate our Merchant Team under Donna Perez and
  our Production Team under Mark Rachman who really made this happen.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.72%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.72%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I would say that what we&#146;re really finding as we&#146;re
  seeing less issue with lead times in the Far East we still see us inching
  away at getting more Far East production or import production than U.S. I
  would also say that we&#146;re still producing in Canada.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.72%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.72%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I mean if it&#146;s an interesting thing that duty rates
  on fabric or duty rates on garments bringing into the U.S. are cost
  prohibitive and we do things in Canada just because of fabric duty rates,
  which is too bad for the United States where we would rather be producing.
  But duty rates for fabric have made us, you know, want to produce in Canada
  where I&#146;d rather be producing in the U.S., something I wish could change
  obviously.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.72%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.72%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Adrienne Tennant):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So how much is in the U.S. right now?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.72%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.72%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I think it&#146;s around 45% - 48%, BEBE SPORT being
  primarily in the U.S. still, logo being primarily in the U.S., collection,
  you know, our suiting, which all used to be U.S. based, is now we&#146;re really
  seeing Canada and China really overtaking the U.S. pretty dramatically.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.72%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.72%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And it has a lot to do that, you know, we use a lot
  of Italian fabric and I don&#146;t know how much credit we get for that, we try to
  publicize that in our catalog. And Italian fabrics are just cost prohibitive
  with heavy rule bringing them into the U.S., so we find ourselves doing it in
  Canada and China.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.72%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.72%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Adrienne Tennant):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.28%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay. And then just as far as the price points they
  seem to be dramatically higher at the collection in Neda. What type of
  testing have you done kind of just to see if there&#146;s any price resistance on
  the product?</font></p>
  </td>
 </tr>
</table>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt .0001pt 90.0pt;text-indent:-90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading -->Gregory Scott:</p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Well I mean I think first off Neda is a brand new
  concept.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Adrienne Tennant):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Right.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Neda is something that, you know, you just can&#146;t
  test. You have to say, &#147;I believe, I think there&#146;s white space, I think
  nobody&#146;s addressing this customer, I&#146;m going for it.&#148;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Adrienne Tennant):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Right.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">That&#146;s what we did. In terms of COLLECTION bebe I
  would say that, you know, it&#146;s a small, small, small part of our business and
  the fact is it&#146;s almost like a test because this is the way we would normally
  test, 18 stores, you know, limited styles, this is how we would normally test
  anything.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Adrienne Tennant):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Right.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So with this launch it really truly is like a test
  and if it&#146;s very successful believe me we will expand in more stores. If it&#146;s
  not successful, you know, we&#146;re going to address it and we&#146;re going to see
  where the future holds. We&#146;re currently planning on holding a runway show for
  the spring collection in Los Angeles in October and, you know, we&#146;re still
  proceeding with that.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And, you know, unlike some analyst&#146;s reports that
  I&#146;ve read it is not just a folly for us. We believe its brand enhancing, we
  don&#146;t believe it&#146;s a waste of shareholders dollars, we believe that it really
  leads our brand, we believe it gives us the creditability that, you know,
  we&#146;re not a junior brand. We are a design driven brand and I think its
  long-term strategy.</font></p>
  </td>
 </tr>
</table>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.36%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So it is not a huge expense, it is not causing our
  SG&amp;A to go higher dramatically. So, you know, I really want to counter
  some of those reports that are out there about COLLECTION bebe.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.36%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.36%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Adrienne Tennant):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Great. Thank you so much. That was incredibly
  helpful. Good luck.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.36%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.36%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our next question comes from the line of (Holly
  Guthrie) with Morgan Keegan.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.36%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.36%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Holly Guthrie):</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Good evening everybody and congratulations on all of
  your hard work. I have a couple of questions, first could you go back and
  talk a little bit about partnering with your key suppliers? Are those
  domestic or international suppliers and what kind of margin opportunity can
  we look for going forward and what&#146;s the timeline on that?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.36%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.36%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">You know, it&#146;s interesting this is really the first
  time, you know, I don&#146;t know what conference call number this is for me, but
  we&#146;ve really talked about margin. We really don&#146;t usually go to that level as
  Walter said. I think the only reason we&#146;ve discussed it is we are seeing some
  improvement on our IMU for the first time in several seasons.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.36%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.36%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And it&#146;s due to the fact that we have identified,
  you know, four to six key partners, truly in the Far East, that we&#146;re going
  to say, &#147;You&#146;re important to us and we want bebe to be important to you and
  we&#146;re going to make some strategic alliances so that we can improve our
  margin. We&#146;re going to give you the business, but you&#146;re also going to help
  us with some - with the costing.&#148;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.36%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="17%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:17.36%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="82%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:82.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And, you know, it&#146;s worked. And I was in the Far
  East the last week of June, I met with all of these suppliers, with my Head
  of Production, my Head of Merchandising, my Head of Design and we really
  understood the opportunity that lies for us. I don&#146;t want to get totally
  optimistic here. I just want to, you</font></p>
  </td>
 </tr>
</table>

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<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
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  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">know, I want to stay conservative, but I want to say
  I see opportunity in IMU based on these partnerships.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And then it is the Far East versus domestic though
  as always we continue to have domestic partners, but I see the leverage
  really coming from our Far East partners today.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Holly Guthrie):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Great, thank you. And then a few questions on
  clubbebe, first could you quantify how the membership grew over the last year
  to give us some feeling of, you know, the run rate and how many people signed
  up per quarter. And then could you talk about what percentage of your customers
  now are clubbebe and how often that bebe clubbebe customer is shopping?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Let&#146;s see clubbebe, so I think we launched it as a
  test since last September. We went to all stores by maybe end of October. So
  really the million plus names we have today all happened last year because
  there were some names we brought over from our old database into the
  database, but it was a few names it wasn&#146;t a lot of names.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We are continuing to see the run rate of additional
  names to be very consistent. I&#146;m surprised we&#146;re not seeing a slowdown,
  meaning are we acquiring new customers every day, which we are for the
  database, or are customers just deciding to sign up for clubbebe? We don&#146;t
  know that answer, but our run rate of acquisition continues to be very
  consistent from week-to-week, from month-to-month since really, I would say,
  maybe spring. And then your other question, I&#146;m sorry, on clubbebe?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Holly Guthrie):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Just how important is that customer to your total
  business today? And then also how often does she shop compared to your other
  customers?</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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<br clear="all" style="page-break-before:always;">

<div>
 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>

<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading -->Gregory Scott:</p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">She is very important. She is incredibly important.
  And, you know, Barbara Wambach and her team did such an amazing job. We could
  not have done it without her or her team. This was not my background, it was
  not Walter&#146;s background and it&#146;s something that they did that really has
  added a huge benefit for bebe and our long-term strategy.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And, you know, everyone talked about loyalty
  programs and we kind of talked about it too and I don&#146;t think we knew what it
  meant until now we have it. And we see what it means and we see, you know,
  our customer, as I said before, is not driven by price. Discount is not
  what&#146;s driving her. What&#146;s driving her is exclusivity. What&#146;s driving her is
  being part of our club, being part of bebe. Like she loves it and she loves -
  she wants more from us.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And that&#146;s what we need to work on right now really
  is giving her more for being part of our club. And, you know, we&#146;ve got to
  dedicate some more resources to providing more fashion information for her,
  providing more exclusive designs for her, giving her more perks besides a
  discount. We don&#146;t want to be a discount brand, we don&#146;t want to be that&#146;s
  the reason she&#146;s joining our club.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Holly Guthrie):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay. And then one more question on clubbebe. Going
  back, I think it was point 6, you said something about interactive training
  material. Is that to support the clubbebe or is that for other things too?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">No that really is funny if you can believe a company
  that&#146;s celebrating their 30th anniversary this year has never had formal
  training that comes from the corporate office. Meaning we&#146;ve always had
  training guidelines, we&#146;ve always had training books in our stores, but we&#146;ve
  never had an interactive one voice this is how everyone does things and we
  launched, Barbara Wambach launched, about a year ago, or maybe even a year
  and a half ago, an initiative to drive training from our corporate office to
  our field.</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt .0001pt 90.0pt;text-indent:-90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>


<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading -->And what we&#146;ve done is we&#146;ve launched already
  two modules to the field where we&#146;ve given them, you know, here&#146;s how you do
  it, here&#146;s welcome to bebe, like this is what it&#146;s all about, here&#146;s how you
  do it and then we actually have testing materials that are interactive that
  we score our Associates.</p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We want a trained associate base and management base
  and we also realized we needed this consistency and this formalized training
  to open the knowledge door that we&#146;re continuing to open today. So it&#146;s
  really not focused on clubbebe, it&#146;s really focused on the training, the
  development of our force in the field.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Holly Guthrie):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Great. Thank you.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our next question comes from the line of (Harry Ikenson)
  with (Soleil) Securities.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Harry Ikenson):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Good afternoon. Congratulations. Can you hear me?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes. Good afternoon Harry.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Harry Ikenson):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Great. Okay I have a couple of questions. One, first
  of all I think your stores are great, but for the preview fall event for this
  evening it was my opinion that you ran out of goods too quickly for the last
  event and particularly on the East Coast remember I was asking you about
  timing of freighting and all of that stuff. Your inventory is up. Do you feel
  you have a better position inventory for this event than the last event? And
  then I have a couple of other questions.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scotty:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yeah Harry we do. I would say that Donna Perez, our
  new GMM in bebe, and Tom in SPORT and Joanne in accessories did a phenomenal
  job of really</font></p>
  </td>
 </tr>
</table>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading -->getting the collection premiere. Our inventory
  position is better than it was last year. You know, this merchandise doesn&#146;t
  come to the sales floor until tonight at 5:00, so the East Coast it&#146;s
  happening now.</p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">But, so the customer has not seen this product until
  right now at 5:00 and our inventory position is better. It&#146;s been probably
  the most planned event we&#146;ve ever done. We&#146;re getting better at it, you know,
  five years later. And, you know, our windows changed last night in all
  divisions to reflect this new product, so I think we&#146;re really setup for it.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Harry Ikenson):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay, well I&#146;ll be going there shortly after the
  call.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Harry Ikenson):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A couple of other questions, we&#146;ve also talked about
  in the past about AURs, average prices and you don&#146;t think they&#146;re going to
  be going up and then they keep - your average dollar sale keeps going up.
  Could you comment on what comprises the outlook for the comps by components?
  Do you still think it&#146;s going to be driven by average dollars or are
  transactions going to start to kick in? What are going to be the main
  drivers?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Walter Parks:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Well I think what you&#146;ve seen this spring Harry with
  the ADS is really, as hard as it is to believe, we&#146;re selling a higher mix of
  full price to markdown and as a result we&#146;re seeing a higher ADS. As it
  relates to the fall while that certainly can&#146;t continue our hope is, similar
  to the last several months, is we&#146;ll see an improvement in transactions,
  something we didn&#146;t see last fall.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Harry Ikenson):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I&#146;m sorry. Say the last part about transactions
  again.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Walter Parks:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We believe that those will continue to grow, which
  didn&#146;t happen last fall.</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt 90.0pt;text-indent:-90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.4%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading -->(Harry Ikenson):</p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.6%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay. So the transaction comparison is a little bit
  easier starting at this point going forward?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.4%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.6%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.4%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Walter Parks:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.6%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Well really in the fiscal second quarter.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.4%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.6%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.4%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Harry Ikenson):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.6%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.4%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.6%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.4%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.6%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And Harry I think what&#146;s to add is, as one analyst
  said, our fashion was really bad and, you know, we were fashion plagued and
  our June was going to be a big markdown. It really wasn&#146;t and our markdown
  units actually have been running significantly under last year and June was a
  very strong month and I would say to that analyst they really missed it on
  what our fashion was.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.4%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.6%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.4%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.6%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And we were offering fashion to our customer that
  she wanted and our full priced sell throughs continue to be equal to last
  year, which was the banner year for bebe.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.4%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.6%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.4%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Harry Ikenson):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.6%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Right, which I thought was pretty amazing quite
  actually.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.4%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.6%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.4%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.6%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yeah.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.4%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.6%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.4%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Harry Ikenson):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.6%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay. Then something else, you&#146;ve targeted or you
  don&#146;t want to be viewed as a teen or junior company and you&#146;ve talked time
  and again for the last few years about a target age of 27.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.4%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.6%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.4%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.6%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I&#146;ve started to notice in my store visits over the
  last several weeks, actually months, that it seems like more people are
  coming in a little bit older, maybe like 20&#146;s and the 30&#146;s, a little bit
  higher percentage than I&#146;ve seen before. With the clubbebe information have
  you seen that, as my observations in the Northeast, going on around the
  country? Can you comment on that? And then I have another question.</font></p>
  </td>
 </tr>
</table>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>


<p style="margin:0pt 0pt .0001pt 90.0pt;text-indent:-90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading -->Gregory Scott:</p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">You know, Harry I think, you know, we continue to
  see in clubbebe about 27 to 28 average. We unfortunately really don&#146;t know
  what it moved up from because our database wasn&#146;t great before. So now we
  know we&#146;ll be able to clearly tell you now.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Subjectively I&#146;m right with you. Tonight will be interesting.
  I&#146;m not seeing, you know, I used to see teenagers with their backpacks in our
  store shopping for denim and logo. I don&#146;t see her very much anymore.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Harry Ikenson):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I don&#146;t either. No.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Walter Parks:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And I think what Greg had said earlier, again we
  don&#146;t know how much the average age has moved up, but she is older and she is
  more affluent.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Harry Ikenson):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay. And then that brings me to something else
  then. How important do you think what&#146;s going on now with the fashion cycle and
  how long do you think it might last with new silhouette dresses becoming
  important again, suits becoming important? Are we in like the 5th inning of
  it? Is it going to be rather quick or do you expect it to last a couple of
  years? Tell us a...</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Walter Parks:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We&#146;re hoping at least through the first fiscal
  quarter.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Harry Ikenson):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I mean Harry, you know, for instance we as a company
  really started this last fall.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Harry Ikenson):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Right.</font></p>
  </td>
 </tr>
</table>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>


<p style="margin:0pt 0pt .0001pt 90.0pt;text-indent:-90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading -->Gregory Scott:</p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I would say she wasn&#146;t necessarily ready for it last
  fall. We were early and we continued through holiday, we were still early. By
  January you saw the nine comp, she started to say yes to this assortment. I
  think what we&#146;re seeing is now that we&#146;re in the assortment full blown now
  we&#146;re seeing some of the competition start addressing this assortment.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So whereas no one picked up any of it before I&#146;m
  starting to see it out there and, you know, what inning are we in? You know,
  hello I wish I knew. You know, as always with bebe we&#146;re very - we&#146;re always
  moving on, we&#146;re always trying testing, we don&#146;t leave, you know, if things
  are great we continue to reorder.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So as - I&#146;m testing new things every day and new
  silhouette&#146;s, silhouette changes, new uniform changes because I don&#146;t ever
  want to be caught with being late on time because she looks to us to be first
  on the trend.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So I really can&#146;t say where it is. I think it&#146;s a
  shift and it&#146;s a momentous shift. I think denim had a long ride. That casual
  look had a very long ride. This will probably have a long ride, but it&#146;s
  going to have iterations.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Harry Ikenson):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay. And then the follow-up to that, what I&#146;m
  getting at is if it&#146;s a strong enough silhouette change and a strong enough
  shift do you think it&#146;s strong enough that if the consumer slows that the
  bebe customer is still going to be just as interested in buying because
  you&#146;re on trend and newness versus what might happen in the...</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Walter Parks:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Harry I think it&#146;s very hard to predict the larger
  macro economic issues and how the customer continues to respond.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Harry Ikenson):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay, well I was going to give it a shot. Okay.
  Congratulations. I think the stores look great and I&#146;ll be there tonight.</font></p>
  </td>
 </tr>
</table>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>


<p style="margin:0pt 0pt .0001pt 90.0pt;text-indent:-90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading -->Gregory
  Scott:</p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All right. Thanks Harry.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Harry Ikenson):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thanks.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our last question comes from the line of (Christine
  Chen) with Pacific Growth Equities.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Christine Chen):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank you. Congratulations. Fabulous quarter.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank you Christine. Thank you.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Christine Chen):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And I think the stores look great.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank you.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Christine Chen):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I wanted to ask, you had mentioned the improvements
  in accessories, but you didn&#146;t talk about handbags and I certainly think that
  the handbags look very different than what you had in the stores and they
  seem to be selling out, at least in the Bay Area, and just wondering if you
  cared to comment on that?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Handbags have been the only category I would say,
  Christine, that have not turned the corner. However, we will be landing in
  the next two weeks two large collections that, one, we know a lot about
  because we tested it in spring and summer and it&#146;s going to be successful. I
  mean I would doubt if it&#146;s not. The other is a new brand new collection</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I would just say that handbags have been the one
  category that we&#146;ve struggled and what&#146;s happened there I think is as you
  shifted, for our customer at least, and obviously the bebe customer is very
  specific, as you shifted out of</font></p>
  </td>
 </tr>
</table>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">the hobo shape us trying to find a shape that she
  can carry all of her things in, but is still fashion driven has been a little
  difficult for us.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We are seeing her pick up the dome bag, we are
  seeing picking up the doctor&#146;s bag at a new shape to replace the hobo,
  whereas the clutch as we went after it did not seem to do that.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And I think whatever women always said about the
  clutch, &#147;It&#146;s great for evening, but I can&#146;t wear it for the day.&#148; it always
  makes the clutch a little much - a little less in part of the business.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So I would say you caught it, but yes handbags we
  have continued to struggle and we haven&#146;t hit it. But I do have a lot of
  confidence in this new collection that will be landing in stores next week.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Christine Chen):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And then as far - I seem to recall, and maybe this
  is just me, but I seem to recall that the average income of your customer was
  around $75k. Is that accurate?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Walter Parks:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Most - the data that we were looking at last week
  that supported the age also gave a range of $75k.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Christine Chen):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And then with the collection even though it&#146;s going
  to be a small part and help elevate the bebe brand are you trying to go after
  an older customer or is that just a default because presentably older
  customer has more money?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yeah I think that&#146;s a default. I mean look at Paris
  Hilton. You know, I mean there are a lot of those girls around now. I mean
  it&#146;s interesting. I think the 19 - 18 stores that we&#146;re putting COLLECTION
  bebe in you go to Rodeo Drive, as you know, it&#146;s not a money issue, it&#146;s a
  look and feel issue.</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt .0001pt 90.0pt;text-indent:-90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

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<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So what we&#146;re really trying to do with COLLECTION
  bebe is augment in these locations like Rodeo Drive or like one of our Vegas
  locations or like Columbus Circle or like Oak Street or like Century City, I
  could go on, that could really add on this extra layer because the consumers
  already there and we&#146;ve never - we see it as a way to continue to raise
  either, one, the comp or, obviously, the average dollar sale in these stores
  because where do you go from here? You know, if you&#146;re at 1,000, 1,500, 2,000
  a foot you&#146;ve got to start adding higher price points, less units because
  we&#146;re not a unit company. So we see that as part of that strategy.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Christine Chen):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay. And then the last question, with the clubbebe
  mailings that you send out are you able, and I don&#146;t know if you&#146;re doing it
  right now, are you able to sort of segment who your higher spenders are and
  maybe offer them something different now that you have the clubbebe database?</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We are and, you know, I think Barb and her team are
  working on that. Like, for instance, the 30th anniversary catalog our best
  spenders will have a large version of that catalog. Not in terms of pages,
  but it will be a much bigger magazine looking feel to it because we believe
  that drives them.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Walter Parks:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So you have to increase your spending to get it.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Christine Chen):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I was just going to say I guess I&#146;ll know where my
  spending level is when I get that catalog in the mail.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">You will know if you&#146;re a part of that elite group.
  Yes.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Christine Chen):</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Okay. Good luck. I&#146;ll go to San Francisco Center
  after all.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gregory Scott:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All right, great.</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>


<p style="margin:0pt 0pt .0001pt 90.0pt;text-indent:-90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading -->Walter Parks:</p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Take care.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">There are no further questions at this time.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Walter Parks:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And thank you everyone for joining us today.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="16%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>
  </td>
  <td width="83%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:83.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This will conclude the Fourth Quarter Earnings Call
  for bebe. Thank you for joining us.</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt .0001pt 90.0pt;text-indent:-90.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">END</font></p>

</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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