[Hank Kerchief]

“Um. No. If your bottom line is 1 million out of revenue of $50 million. Subtract 8% of revenue = sales of $46 million. Your bottom line is now -3 million. Don’t ever run a business.”

1 million is 2% of 50 million, so the margin is 2% of whatever revenue there is. If the revenue is 46 million, the bottom line is 2% of 46 million, or $920 thousand.

What you are saying is the cost of doing business is a constant $49 million, regardless of the revenue. If that’s how your business is run, it will not last long.

Hank

[rb22982]

You do realize that the majority of your costs are fairly fixed? Leases, IT support, corporate, etc. It doesn't scale like you think it does. It's not *my* business that I work for but we're doing just fine--thanks for asking.

You are correct that you can cut inventory in time but most of these retailers did not as the holiday stuff is usually ordered 3-6 months in advance. You can cut back on payroll some. There are things that you can do but an 8% cut in revenue does not mean you will come close to maintaining the same margin. There is an article out today that they think 25% of retailers will go into Bankrupcty next year.