That makes a difference because we have more capacity. And our focus right now is to service our full price SKUs, to service DTC and ensure that as we get ready for the holiday season, the newness is on the floor. And so, I think to your point, it’s [Technical Difficulty] every day and the teams are committed to ensure that we don’t miss a sale.
Oliver Chen: Thank you. Best regards.
Harmit Singh: Thanks, Oliver.
Operator: Thank you. Our next question comes from Laurent Vasilescu of BNP Paribas.
Laurent Vasilescu: Good afternoon. Thank you very much for taking my question. And Michelle, it’s great to have your voice on the call. Chip, Harmit, I would love to ask about the strategic pricing actions you took in your Tier 3 distribution in US. Just a little bit more color around just what you saw in terms of price elasticity. Are you confident that it’s really — it should be isolated into — in the Tier 3 distribution or would you potentially revisit this across other silhouette styles and points of distribution? And then maybe just another question, if I may, I would love to hear Harmit, if we go back to 2020, ’21, you talked about $200 million of gross savings. I know you’re not necessarily prepared to talk about it, but could we see some kind of magnitude of that type of savings as you think about 2024 and beyond?
Chip Bergh: Yes. I’ll take the first question on pricing. And again, I’ll try not to be too repetitive, but I’ll keep it pretty brief because the data is still pretty fresh. As I said, you know, we announced the price increase in early August. Each customer implemented it on their own timing because it was based on sell-in. And so the timing is kind of been rolled out or weaved out customer-by-customer. But where we have seen customers take pricing on these six items, we have seen the trend on those items being flat. We have seen a distinct change in trends. It’s still really, really early though. I mean and we still have some customers, we have one customer that just put the price into place, the reduced price into place this past week.
So it is still really early days. And that’s why I’m trying to temper this with a little bit of, not getting too excited about it, but I will say we were very, very disciplined in trying to really understand what were the most price-sensitive items in the line and adjusting the price on those items and those items only. And I feel pretty confident that we picked the right items and that we’re not going to have to go any furthermore. I know that that was a big concern that many had. I think we, you know, we’ve done a good job of isolating where we were really, really vulnerable and we addressed the price-value equation on those items. And our stronger items, as I said, the 501, we didn’t touch the pricing on 501. So I think we’re in a pretty good place right now.
My mother said, never say never. So, we’re not saying, we’ll never take the prices down, but at the same time, I’ve got a pretty high degree of confidence that we’re in a good place right now.
Harmit Singh: Yes, and Laurent, to your direct question, I’m not going to get into the numbers. But — but you know, the fact we’re speaking in the call, the fact that I’ve said is material, should — should indicate to you that this is an important piece of our initiatives that the entire Company is focused on. The difference between this and the last time we did it and we have done it once or twice before, in fact, two times, and it’s made a difference on operating margin. So we have history supporting us. But I think the difference in this case is that it’s towards this pivot to DTC. So we are focused on how to drive more productivity in the whole store — just focus on how to drive more of an improvement in working capital through inventory turns and looking at the cost.
