Alex Straton: Great, thanks a lot. Good luck, guys.
Joey Zwillinger: Thanks Alex.
Annie Mitchell: Thanks Alex.
Operator: Thank you. One moment for our next question. Our next question comes from Janine Stichter with BTIG. Your line is now open.
Janine Stichter: Hi, everyone. Good afternoon. I want to dig in a little bit more into, as you think about the optimal channels of distribution for the brand. First off, on the wholesale side, it sounds like you’re considering re-ramping that business in the back half of next year. So, I’d just be curious to understand the types of potential new partners that you’re looking at, what you think that brings you both from a new customer acquisition and a brand awareness standpoint. And then, on the retail business, I’d just love your thoughts on if you’re exploring any potential store closures and just what the profitability of the fleet looks like right now, if there’s any major variances in performance that should be called out. Thank you.
Joey Zwillinger: Okay. Thanks, Janine. I will tackle the first part of that. And maybe on the retail side, Annie can jump in. When you ask the question about optimal, I think it’s a good way to frame it. What we’ve always envisioned is that we want to be a very effective omni-channel retailer. And we’re a brand first. We want to delight consumers where they want to shop the best. And one of the examples that we gave today is an impending launch on a digital ecosystem or digital marketplace in the U.S., just as an example of making sure that when we have product that we can segment to the right channels, that we’re going to deliver that and make sure we capture opportunity to meet consumers where they want to be met. So, what does that look like if you fast forward way down the line?
I think it’s a little hard to say exact percentages, but there’s a very material portion of our business that should be in wholesale. And we think about that as a very profitable and brand-building exercise for us where it lifts awareness, and frankly, you can trade some of the gross margin between direct and wholesale for some of that marketing that you otherwise would spend to drive awareness. So, that’s very important for us, and anticipate building that, as we noted, particularly starting in 2H ’24. But we expect that to grow much more significantly. And in terms of the different channels, there’s a whole sequence that we’d like to undergo in order to build an effective marketplace, working with some smaller accounts that drive perhaps leading indicator of trend for consumers onto other premium segments of the wholesale marketplace like we have in department stores and outdoor and sporting goods.
And I think in some of those channels, there’s other noncompetitive accounts that we’re talking to and are pretty excited about the opportunity to work with. So, we’ll give you more detail as we get into 2024 and give you a picture for what we expect for the year, but that’s generally how we’re thinking about it.
Janine Stichter: Really helpful. Thank you.
Annie Mitchell: When it comes to retail, we have paused opening new retail doors this year. We are done with all the doors that we’re going to open. We don’t currently have any closures planned at this time, but we will continually analyze and evaluate our retail fleet’s performance and options. As Joey mentioned, our focus is to drive growth by focusing on our most profitable products, channels and regions. And for retail, that profitability comes from us executing on the initiatives that we’ve already started to put in place. And also let’s go back to why do we have stores to begin with? We do have a retail footprint because we operate in an ecosystem for our consumer, and these stores are the best expression of our brand to that consumer.
