Kasper Rorsted: Well, James, first on the inventory, I mean, what I can tell you that the increase is higher in apparel and footwear, that we also said we want to be more promotional on the apparel side than on the footwear side. That’s what I can tell you about apparel without going into further details. On the marketing spend don’t expect any fundamental change over potential net sales, these are in 2022 now going to 2023. Maybe going in the right direction in 2023. But we want to see what really the flexibility that we have in 2023. But that’s part of our business improvement programs that we not just keep the ratio on probably different net sales that we originally had planned on the game. But depending on what the net sales development will be in 2023 want at least keep the ratio but potentially get better as we want to be, as we want to get more out of what we spent in 2023.
And so far, we haven’t had such a crisis or such a profitability for many, many years, as we experienced in 2022. So now is clearly a wake up call to look at every year again to do it more effectively and marketing and get more for the bang or for the buck, what we invest. So clearly keeping the ratio of better.
James Grzinicl: Right, thank you.
Operator: Next question is from the line of Aneesha Sherman from Bernstein. Please go ahead.
Aneesha Sherman: Hi, thank you. So I have two questions. The first one is on China kind of looking at that business medium term. So you’ve talked about cutting back orders, closing unprofitable stores, significantly reducing your footprint. Is it right to say that you’re looking at perhaps a smaller and more profitable business medium term? And in related to that last quarter, you talked about the medium term margin target of 30% over time. How do you see that playing out? Is that still the target that you’re envisioning with the store closures and profitability or is that ramp up the target? And then my second question is on the D2C versus wholesale performance in North America and EMEA. There’s obviously a difference in performance between the channels there. I am curious was that mainly due to kind of mix effects and pricing or underlying demand? Or were there some takebacks embedded in there? What’s driving that differential? Thank you.
Kasper Rorsted: Yes. First on China. Clearly, we believe in as a midterm opportunity in China. But we also believe given where we are we have still a lot of lockdowns and immediate consumer sentiment in China and China has not opened up. It’s really important that we get stronger before we get bigger. So we are very, very confident to get to the right profitability in the short term midterm first. And then as the market is opening up, which we don’t know when it’s opening up, but when it’s opening up, we want to be prepared, that we have the right size inventory, that we’re back to a better profitability. And I’m not saying right now, because we get the guidance in March that we get immediately to 30% profitability again, but that’s the number one priority.
And then when the market opens up, we believe, the western brand is well-positioned in China again, and we can start growing significant in China again. So clearly, we believe in the midterm. We believe in the growth in China, but the market needs to open up. We want to make sure that inventory is right. And we are working on the profitability relentlessly to be ready for growth when the market is opening up. On D2C, you’re right, I mean, D2C was growing faster in Europe and North America. And the reason is, when we saw a more muted September, they’ve automated decision to sell in more cautiously into wholesale as you’re selling through our D2C. And of course, it’s impacting some of the tremendous order books that we have as the conversion wasn’t at the level that we used to have.
