José Neves: Yeah, I’ll take that question. Thank you. So I think the timing for Neiman Marcus Group is compatible with the size of this client. I mean, we’re talking about a multibillion dollar company, one of the largest players in luxury with a very sizable online operation, and therefore, complex operations, as you would imagine. So we think that the time line is actually very, very good compared with similar enterprise offerings from other large size enterprise grade companies. And we would expect that to be the case also with YNAP. We’re engaging with regulators. As we said, we would in several restrictions upon announcement, and we will keep you at pace in terms of the timings.
Kunal Madhukar: Thank you so much, José.
José Neves: You’re welcome. Thank you.
Operator: Our next question is from Louise Singlehurst from Goldman Sachs. Please unmute your audio and ask your question.
Louise Singlehurst: Hi, good afternoon, everyone. I will stick to my one question diligently. If I could just ask a question back on demand generation. It was quite a big cut, I guess, year-on-year. And I realize it’s obviously ways that you’re finding more efficiency in that cost line. But there at the assurance that we can give us that there’s no risk of cutting the cost and having that impact on the customer acquisition. I hear the point about the retention, I think, Stephanie, you talked about the 90% retention across the private clients. But I guess how many customers go straight to the highest tiers? Is there another risk of reducing the inflow of new customers at the entry — at the entry level, or does the data tell you something that it’s actually obviously much more efficiently to miss out on some of that entry-level base? Thank you.
Stephanie Phair: Hi, Louise, I’ll take some of that. So I think, look, taking us back a couple of quarters and where we’ve discussed our strategy. We’ve always said, look, we have the capabilities, thanks to our investments in marketing tech to really acquire a lot of customers, and we did over the COVID period. We really leaned in and acquired a lot of customers. That hasn’t stopped. We continue to acquire those customers to the tune of 500,000. We retain a solid number of those. But I think this is also a deliberate strategy to really lean into our most valuable customers and valuable targets in terms of new customers. And we’re starting to see that. We’ve seen it particularly in the US. You saw Elliot stated that our drop in media spend doesn’t correlate to the exact drop in sales, so we’re really seeing efficiencies there.
So I think where we’re really leaning in is our retention efforts. And we’ve been talking about retention and our efforts. It’s just what we do, but we’ve really been leaning into that over the last year or so, everything from increasing personalization, curation, driving sales from the app, where you really see strong retention and really focusing on those higher cohorts. So speeding up, you talked about the move into higher cohorts, speeding them up our access levels, which we’re doing and then really focusing on that private client. It’s something that the industry in general does, and we are doing. We have a very large private client business to work with. In fact, our private client business is actually as big a business as the entirety of some of our competitors.
So we really have a huge base to work with. And we’re doing — now that live events are back, we’re doing targeted events with private clients. We talked about Art Basel. We’ve done in-store events. We’ve really focused on particular markets in the US where we’re seeing that, whether it was LA with our beauty launch or Miami, Houston, Atlanta. So yes, I think what you will see is a drop-off in the lower value but with a real focus on the long-term value.
