Zach Donnelly: Got it. That’s really helpful. Thank you, Farooq. And kind of piggybacking off of that just really honing in on retail segment gross margins, something we have been kind of tracking really closely maybe over the past month or so is just credit delinquencies and kind of financing for big ticket for discretionary items?
Farooq Kathwari: Yeah.
Zach Donnelly: We have noticed over the past two quarters, you have kind of called out increased financing costs as an impact to retail gross margins. I was just wondering, could you — do you have any sense of what percent of your retail sales are financed versus non-finance? And then on that end, can you provide any color on what you are seeing in terms of interest rates associated with that?
Farooq Kathwari: Yeah. That’s a good question because interest rates on financing has gone up quite a bit and we were offering until two months back 24 months free interest, I mean, loans with a free interest for 12 months to 24 months…
Matt McNulty: 24 months.
Farooq Kathwari: … 24 months and we said, no, that was too much. And even though we realize that was probably close to 15% to 20% of our business was done with that — with those loans, we took it down to 12 months and instead of 24 months and because I think the interest rates went up from 3% to close about 5%, 6%. So I think as we go forward, what we feel is that still there are people who need financing, but we believe that 12 months is sufficient. Now, we have to be careful that, we don’t want to lose business. So we are going to watch very, very carefully, but at this stage, we have taken down from 24 months to 12 months, which has an impact of about, as I said, the impact on the margins, that the interest has gone from 5% to 3% or so.
Zach Donnelly: Got it. Okay. Yeah. Thank you. That makes sense to us. And then, I guess, my last question just kind of just on wholesale in order trends and just breaking those out. We kind of noticed that in terms of contract orders, you were down about 18% year-over-year this quarter. I was just wondering if you could maybe touch on what sort of impact is that or if there is any sort of timing shift that’s impacted that where maybe the GSA is pushing out orders later potentially into fiscal 2Q for you and just how to think about that maybe moving into the next quarter, that would be really helpful?
Farooq Kathwari: You have actually answered most of the question yourself. It is. The GSA used to have a cut off at the end of the government’s fiscal year that is September 30th, that all orders had to be put in. But this year, I don’t know if they will do the next year, they have allowed them to enter orders after the end of the fiscal year. So that way what it’s done is, it’s created sort of lower orders in September, because not everybody didn’t have to put it in. So they are now going to put this in this quarter. So I — we believe from what we hear is that the orders that didn’t come in, in September, they will come in this quarter and that’s been the one major factor. The other is, if we talk of wholesale, obviously, when our retail business is lower, it does affect our wholesale orders and most majority of our wholesale is from our own retail division.
But when you asked about the question of the government, yes, the government business has been lower and that outside business that you referred to that’s non-retail was impacted by this decision by the State Department and the GSA that to not enter all the orders in September.
