Christopher Jarrous: Very good. Thank you. Good to hear. Things seem like they’re turning. Two questions. One is off the back of Chris’s question before. With the new people you have on board, whether it’s anecdotal or any data you can share, what market share looks to be given the environment? And then promotional activity, whether it’s you guys or feeling the need to do something versus what competitors are doing or what other people are doing. How would you rate promotional activity at this point in the cycle and what your expectations for market share are for here and beyond?
Sean MacDonald: Our market share is still in the 2% to 5% range in many areas. In terms of promotional activity, if I look at our competitors, I think there have been some handbrakes that have pulled up. We are pushing hard still. We’re not holding back on promoting our products. We’re pushing hard in terms of getting products on the inventory side out to riders so that we can get some awareness out there to generate some sales in the future. So I would say that in the cycle right now with inflation, we’ve seen cuts across the board with many of our competitors and many industry players. But we are pushing hard still. We still feel strongly that there’s an opportunity to invest right now for the future. So market share for us is still in the 2% to 5% range, depending on the product category. But we’d like to get much higher than that. And hopefully with the gap in the market right now on the promotional side, we can push quite hard.
Christopher Jarrous: Okay. And what about the promotional activity by your competitors in terms of pricing? So sales, just trying to get product to move. What do you see?
Sean MacDonald: Totally understand. I understand what you mean in terms of pricing and discounting. So looking at our competitors, I mean, there’s some huge discounts out there. Many of our competitors are — it looks like they are going well below cost on some of their product lines. We tried really hard not to do that. You can see that our margins have increased. We’ve also had to take a really hard look at our inventory levels over the last year to see any areas where we might need to improve efficiency of the inventory holding, taking a hard look at that. And despite that, we still have healthy margins. There is certainly some promotional activity that is going on out there. We are trying our hardest not to bite into that too much, because we believe in the strength of our brand moving forward.
But, of course, I mean, there is a point when inventory does need to be discounted and yet will be its best to retain brand equity. And we do see a lot of discounting out there on the competitor — in the competitor landscape. And I think we’re trying to balance it out as best as possible, Chris. But as I said, our margins did increase last year, which I think is positive in the context of the current market conditions.
Christopher Jarrous: Okay. Fantastic. Thank you. That’s it for me.
Sean MacDonald: Thanks, Chris.
Operator: Our next question comes from the line of Olivier Colombo, a Private Investor. Please proceed with your question.
Unidentified Analyst: Yes. Hello, Sean.
Sean MacDonald: Hello, Olivier.
Unidentified Analyst: I just had some follow-up regarding the new Adventure line that you have launched this year. And first of all, congratulations because it really looks nice. So did I understand you properly that some of the products have been shipped already in Q4 and the rest will be shipped probably in the next two quarters? And which are the regions that have the full assortment of products so far?
Sean MacDonald: So, we — yes, you are correct, Olivier. You understood correctly. We shipped a portion of the products out last year. And there’s some hangover now of products that are selling — that are going to be shipping during Q1 and Q2. And I mean, currently now, Germany, Switzerland, and a few other European areas, they do have the full range. Those are currently on the way to dealers, which is great, and to chain stores. We’ve got some big chain stores that we’re selling to now in Europe, which is also great. But yes, we shipped out a portion in Q4, and we’re starting to see the bulk of the shipments shipping out now during Q1. We did split some of the shipments in order to make sure that we had the CE certification for those products before they were shipped.
So we got a lot of the CE certificates towards the end of Q4 and managed to ship. And now we are continuing to ship during Q1 and Q2. As I was saying to Chris earlier, this is, of course, apparel, so primarily jackets, pants, and gloves. And of course, Leatt always strives to be a head-to-toe brand, so there’s a lot of opportunity on the ADV side of things.
Unidentified Analyst: That’s perfect. Thank you very much. And I have some questions regarding the European online retailers that have had a lot of problems over the last 12 to 18 months, some have disappeared, some are starting to — not starting, but some are discounting their inventory up to 70%. So I would just like to know how hard have you been hit by these retailers.
Sean MacDonald: I mean, of course, they do tend to discount some of their products. We haven’t had a huge impact from them. What we have done, Olivier, is we’ve changed some of our pricing structures when it comes to dealing with the typical e-commerce player that might look to discount deep. And we’ve done that in order to make sure that we protect the brand as much as possible. In terms of a number of the large e-commerce kinds of players that we are dealing with, that has decreased over time. And we are now looking to, as opposed to going with e-comm players directly, although some of them are still good customers, and we still do work with them as a multi-channel brand. We feel quite strongly that that’s what we need to do in order to reach as many consumers as possible.
But we are partnering with our distributors on the e-comm side as well in order to make sure that we not only get the Leatt brand front and center with as many consumers as possible, but we also, can work with our distributors with the current inventory levels that they have and the future inventory that they’re going to get that inventory through the distributor and either to the dealer or to the end consumer. So, as I said, we see ourselves as a multi-channel business. We sell to dealers, we sell to consumers, we sell to distributors, we sell to e-commerce players. We do what needs to be done in order to get the brand Leatt into the hands of as many consumers as possible.
