Elias Sabo: Yes. Thank you for the question. And your first question, remember, the vast majority of our debt is locked into the late ’20s. And so I think, Ryan, correct me if I’m wrong, it’s like ’28 and 2030.
Ryan Faulkingham: ’29 and ’32.
Elias Sabo: Okay. So even longer, ’29 and ’32. We have 5% and 5.5%, respectively, fixed rate bonds in the marketplace, $1.5 billion of the $1.7 billion. That roughly is outstanding. As you know, we had a kind of $400 million term loan. We had revolver borrowings that were outstanding, but we paid off our revolver borrowings with the proceeds from ACI. So $400 million on $1.7 billion is 23%. We have 76% of our debt that is fixed right now, 23% that’s floating. Clearly, we would rather have 100% that was fixed right now. But if we were to enter the market — and we could, and we talked to our bond investors who have appetite if we wanted to term out that debt, and we have talked to bankers who have given us price talk. The problem is it is kind of a couple few hundred basis points more than what we are paying currently.
And that’s just — you could look at market pricing of our bonds right now trading in the, I think, low 80s. And it kind of indicates a yield to worst that’s 200, 300 basis points higher than where we issued our last debt tranches. So I think rather than going out and terming that debt right now, we’d rather sit with kind of the secured capacity being utilized at a very small level. Remember, it’s only one turn of secured debt, less than a turn of secured debt. So from a financial covenant standpoint, we have availability. We have liquidity. We have no covenant pressure whatsoever. Now obviously, if rates continue to rise, it’s going to put some upward pressure on that $400 million. But I think it’s still — we’d have to consider a pretty big increase in rates happening from here until the rate picture stabilizes in order to have it make sense to have that $400 million tranched out right now.
I think — we think it probably makes a little bit more sense to be patient right now with that. And if the interest rate picture stabilizes later in the year and the bond market starts to recover and we can do a primary issuance kind of closer to where we priced our last bonds, it’s not going to be at 5% or 5.25%. But I think if we were able to kind of narrow that spread down to 100 or 150 basis points and be in the 6s, that would start to look interesting to us to free up the secured capacity. But I think for right now, we feel pretty good having roughly 75% of our debt kind of fixed in our capital structure. Pat, do you want to talk about Lugano?
Pat Maciariello: I’ll just say, and I’m going to give you a wholly unsatisfactory answer, and I apologize, but that is it depends, and I’ll give you some factors around that. The payback on some stores is very fast. In — when we open in Houston, and we have a lot of clientele in that area already, it’s definitely under 12 months. When we open in a greenfield, if we open internationally, if we have an international location opened in ’24, that may take a little bit longer to see. On the inventory question, it’s not formulaic. And it’s not as if company has X on sales, they’re opening Y salons if they open up one more. You do the math and add that. It’s a little less than that, and we gain a little bit of efficiencies in that because we share inventory sort of across salons.
