But I think that’s part of the journey where I feel very confident, because we’ve got a good, strong team there. In the rest of the businesses, I looked at the business, I saw a broad set of opportunity and that has only been confirmed in the first couple of months here. There’s an absolute opportunity here to engage more aggressively with customers through branding and through messaging to customers, and in fact, in the way in which we serve them, both online and in stores in their purchase experience. Coming from a deep operations background as well, as I look across the business and consider the ability for us to shorten cycle times for us to get better at operating the business, just in terms of moving product around, getting our stores in fighting shape.
I look across the business, there are a ton of opportunities there and you will see those as we go through the next few quarters. We’ve spoken extensively to cost reduction and I think the team’s already doing a great job there. The only thing I’m doing, frankly, is to try to deepen that and accelerate it. But we will hit the $200 million, I’m confident of it. And finally, I think, if you look at inventory, we’re not turning enough in the business, that inventory needs to move through more quickly. The benefit of that, frankly, is we’ll have a lower interest bill and inside of our own operations, you’ll see less cluttered back rooms and stores, you’ll see warehouses that aren’t jammed up, and frankly, that will leave us in a place where we’re just a much healthier business.
Dana Telsey: Thank you.
Operator: Your next question comes from the line of Eric Beder from SCC Research. Please go ahead.
Eric Beder: Good morning.
Stewart Glendinning: Good morning, Eric.
Mark Still: Good morning, Eric.
Eric Beder: I want to talk a little bit more about inventories. If you take out Bonobos, what was the inventory impact on the — what was the inventory without Bonobos and when should we start expecting to see the inventory, I guess, with or without Bonobos start to come down?
Mark Still: Yeah. Eric, I can take the — I’ll start with the first part of that question. If we exclude Bonobos, our inventory was flat compared to last year. So Bonobos added roughly $58 million of inventory that obviously was not in our inventory last year. When it comes to the second part of your question as it relates to starting to see that come down, we are intensely focused on improving our working capital and improving our inventory position. So it is a focus of ours to make a meaningful reduction in our overall inventory levels as we move to the end of this year and through 2024.
Stewart Glendinning: Yeah. I mean, sure, Eric. You should start to see that in the first half of 2024.
Eric Beder: Okay. Question for you. I guess the second question is WHP and the agreement there. I know you mentioned some international expansion opportunities. When do you think those will start to impact? I guess the other question is, you had a great acquisition of Bonobos. Do you have the financial — if you can believe you have the financial flexibility to do other acquisitions here in kind of the same structure?
Stewart Glendinning: Well, let me just — let me start at the most important part first. Our primary focus here is driving EXPR back to profitability. That’s job one, job two and job three. The WHP partnership is something that will benefit us absolutely over the longer term, both because of the royalty sharing that we spoke of in our prepared remarks. That’s in no way distracting to us. These are operations that are separate from our operations. They will be licensed and overseen by the WHP partnership and we will collect the benefit as being an owner of that. So that is broadly just beneficial to us without extraordinary effort from us. On the second part, as it relates to acquisitions, we’re going to take that over time. Bonobos was a great opportunity for us. We’re super happy that that brand, which is a powerful brand with a long runway ahead of it, is part of our organization. Right now, job one, two and three is focusing on getting EXPR back to health.
Eric Beder: What do you look at — do you look at the potential — what do you think of the potential longer term for Express in terms of its ability to — what do you think the longer term opportunities are in terms of margins, in terms of the ability of the size of the pieces for Express? I know you’ve only been there two months, so I’m not expecting you to see there…
Stewart Glendinning: Oh! Yeah.
Eric Beder: … but what do you think about that?
Stewart Glendinning: Eric, I think, it’s a great question. Frankly, of course, I mean, when you make a big change like this, you think carefully about what the possibilities are for the business. I just take you back to 2018. I mean, 2018 was a healthy year. It wasn’t an extraordinary year for the business. If I were going to set a benchmark for a place to go back to, that’s what I would look to and you can go back and look at those financials, but you were living with gross margins around 30% and a positive net income. I think that, for me, is the starting point. But this is a business that has all the right building blocks. I think if you give me the opportunity to get through this next quarter, coming back in — at the end of the year, we’ll give you a good set of expectations for 2024 and give you a little bit more detail on what we think the glide path looks like to recovering the full potential in the business.
