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We believe that the financial training, clearly defined segments and daily reporting reduce the overall risk of this endeavor. In fact, the primary constraints we face in accelerating this strategy are our ability to attract and retain the right talent, as well as the patience to allow customer centricity stores the time to make the transition and to achieve their profitability goals. Other challenges are ongoing, such as the commoditization we face in several product categories and issues related to vendors’ profitability which could affect their ability to invest in product R&D over time.

By the end of fiscal 2006, we expect approximately onethird of our U.S. stores will be fully converted to the customercentric operating model, including not only the training but also new employee positions, expanded assortments and, in some cases, new fixtures. The remaining two-thirds of the

stores will have begun their own transformation with the help of the training programs and the assignment of customer segments. In addition, we plan to continue operating lab stores; their role is to test new offerings that can be rapidly implemented across the chain and to explore other potential customer segments.

Yes, we are accelerating our transformation to customer centricity. There will be no turning back.

It is perhaps a natural evolution of the business. We began as a product-centric company, seeking to grow fast enough to survive rampant consolidation in the industry. We then became process-focused, searching for the economies of scale that would deliver a stronger bottom line. Now we view our business as a portfolio of customers, which we believe gives us far richer growth opportunities.