Peter Stratton: Sure. So, I’ll take that one, Jeremy. You’re absolutely right. This is something that we’ve been talking about for well over a year now and the investment that we need to make in order to have site selectors, have store planners and construction folks, project managers, all of that adds up, and it’s all got a deferred return because we’re incurring those expenses earlier for stores that typically, it takes us a year to get a store open. The cost of our stores is typically around $1 million and that’s usually net of some TI allowance that we would try to get. So, we’re definitely pushing forward with those. As Harvey mentioned, we’ve got nine leases that are being negotiated right now. I’m hopeful that we’ll get, I would say 30% of those done in the first half and 70% in the second half, will definitely be more weighted towards the second half of the year.
But we’re — I’m glad we’ve got the nine and hopefully, we’ll get one more, so we’ll get 10 in place for the year. But this is a big part of our strategy. We know that the customer is attractive to the experience in stores and our store associates are one of our secret weapons that not everybody knows about and how well they’re able to engage with and deliver an experience that big and tall customers are not going to get anywhere else. It’s something that we’re going to continue to leverage.
Jeremy Hamblin: Got it. Thanks. And just remind us in terms of the conversions and the remodels, the approximate cost of those when you’re going from Casual Males to DXL and other conversions that you’re doing? Just the range of this cost?
Peter Stratton: Yeah. Of the two types of conversions, we have the casual male being converted to DXL, of which we’re going to get 10 of those done this year. And then, there’s probably another, I would say, five to 10 next year that we’ll get done. Those typically cost $200,000 to $300,000 a piece. And then, there’s the DXL remodels, which is — it’s already an existing DXL store, but we have two stores — actually, three stores that we have — we’ve done this in already in Warwick, Rhode Island and in Troy, Michigan, where, in some cases, we think that by remodeling the inside of the store and there’s a number of changes, which I won’t get into on the call here, but remodeling the interior of the store, that’s about a $300,000 price tag as well.
And there’s five of those that are in progress right now. And next year, we’re going to do a few of those as well. We don’t have the exact number of what we’re going to do yet next year. But we’re continuing to monitor what kind of return those DXL remodels will get for us.
Harvey Kanter: One thing I might add just to that, Jamie — Jeremy, that Peter said, he wouldn’t get into, but I can’t help myself just acknowledge that if you haven’t been at Regal Park, you should definitely make it a point to go when you’re in the city. It’s really rather remarkable, the evolution of what I would call the social community element of the storefront there. I know I referenced this last time, I think I did, the concept of in-home where you have the center island in a kitchen and everyone hanging out and the community and the ability to access our entire online assortment, buy it in the store, pick it up in the store, have it sent to your home, the community of laydowns, the integrated digital experience, it’s really a very different storefront, and we’re quite excited about it.
We’re very early in the process. But as Peter said, we’ll have a second this year and multiple more next year. And as we build new stores, the new stores are being built out in this format of the remodel boxes, but it’s just a compelling store front. And I think it’s very different than most of the retail store fronts you would go into, especially for this core customer who has nearly no other options that pure-play box would provide like we do.
Jeremy Hamblin: Got it. Thanks. And then, last one for me is, I think at the end of Q2, you had a little over 9% of your inventory was of the clearance variety. And you might have mentioned this and I missed it, but where does that percentage stand today?
Peter Stratton: That’s — today, we’re at 9.7%.
Jeremy Hamblin: Got it. And so that’s up about 300 basis points from a year ago?
Peter Stratton: Yeah. I don’t have at my fingertips what it was a year ago, but I remember the 9.7% was where we are at the end of Q3.
Harvey Kanter: Jeremy, what’s a really interesting conversation to explore, maybe not on the call, but later if you’d like, is that our inventories have come down. We talked about we’re 6.5% under last year’s inventory levels. And our view is that clearance and primarily, I would say, units, but also dollars based on what we carry, it’s really important to maintain an offer. And so, we’re actually strategically and tactically trying to manage to a certain level of clearance because we believe in the box as it fits that the reality is the customer gets greater value from the clearance, and that’s our opportunity to create greater value for lower income consumers as opposed to discounting product. But when our inventory in total comes down, and we’re trying to make a certain level of units in the store, by default, the percentage and dollar value penetrates greater.
So, as we’ve always said, 10% is the marker. We’re trying to actually achieve closer to 10% than farther away. So, the migration from 6% to 10% had some thoughtfulness behind it. It didn’t just happen.
