Also:
Despite the reduction in sales, we realized a 4% increase in gross profit, from $737,556 in the six months ended July 31, 2006 to $804,533 in the six months ended July 31, 2007. The improvement reflects the fact that the reduction in our operating level that caused sales to ebb has been focused primarily on lines and vendors that were fundamentally unprofitable. As a result our stores are currently operating with lower volume sales than in prior years, but with substantially higher margins.