So, when you think about when we announced the Polaris strategy, we announced how many door closures. We’ve closed 80 of those. And you’ve also heard that what we’re doing with the small-door format on the Macy’s side, we’ve opened 12 through the fourth quarter of this year. The intent is to open up to 30 by the end of ’25. Very excited about what Bloomie’s is doing. So, if you think about Bloomie’s, Bloomie’s is in a substantially less number of the major metro markets of the country. And we just hit a milestone in the last week by opening Bloomie’s in Seattle. And pleased to say that that has gotten off to a great start. So, there is opportunities [indiscernible] order, but they coupled with our prowess in digital to be able to create two powerhouse national omnichannel brands that really span the level of price points and customers and categories that we continue to traffic in.
Tony Spring: And let me add, obviously I have a soft spot for Bloomingdale’s, so I believe there’s growth opportunity digitally, physically, in both small-format stores and in our off-price division. As Jeff mentioned, we cover a fraction of the country, but we’re going to be surgical in how we expand. We’ve done too good a job, I think, in having a highly productive portfolio of stores to sacrifice that now. Expect also that we’re going to continue to lean into the opportunity to expand margin. That is both in the pricing science, as well as in the mix of products that we sell. Sometimes I think AUR gets mistaken for charging the customer more. I just want to emphasize, we will be competitive on price, but we will look for opportunities to expand our AUR and expand our margin through the mix of categories and the types of products that we sell.
Remember, we’re in the early stages of new order at Macy’s. We’ve seen the margin expansion that we enjoyed at Bloomingdale’s through having greater visibility to our assortment through assortment visualization.
Dana Telsey: Got it. Thank you. And then, ordering patterns as you think about it for the first half of the year?
Jeff Gennette: So, Dana, we’re not commenting on the ordering patterns of next year, but what I would say, I want to emphasize one thing that Tony brought up, which was the level of transition that we’re having, the balance of our assortments in seasonless content. I think when we were looking back at the first quarter of ’24, we ran out of cold weather units faster than we should have. And so, we commented about that on our first quarter call. Obviously, that comes with getting the right receipts in the fourth quarter, carrying the right level of units in all cold weather categories, transitional categories for the warmer parts of the country. I think the team has done a good job on that this year and that should be a nice tailwind for us in going into the 2024 time [Technical Difficulty] in terms of the content of the rest of the orders, stay tuned for the fourth quarter call where we will review all that detail.
Dana Telsey: Thank you.
Tony Spring: Thanks, Dana.
Operator: Thank you. The next question is coming from Gabby Carbone of Deutsche Bank. Please go ahead.
Gabby Carbone: Thanks for taking my questions, and congratulations, Jeff. So you just touched on this a bit, but was wondering if you can dig into the potential levers that you have for additional improvement in the gross margin rate as you look to next year. If you could maybe walk us through the biggest buckets there, that would be helpful. Thank you.
Adrian Mitchell: So, I’ll comment on a few things. Even though we haven’t shared the gross margin outlook for next year, as Tony pointed out, it’s a big focus for us. The one discipline that will not go away is our discipline on inventory management and that has been very helpful to us in terms of margin expansion with our pricing science, our discipline on having less markdowns than what we had pre-pandemic. So that will continue to be a strength for us. As Tony talked about, there are other opportunities around mix. There are other opportunities around how we manage our delivery expense. There are just a number of initiatives that we’re going after to increase our retail margin, reduce our delivery expense, and ultimately increase our gross margin.
But it starts with inventory discipline and working capital discipline on that balance sheet, and then making good choices about our assortment and managing the flow of those goods well so that we have solid sell-through in unit velocity in all of our channels.
Gabby Carbone: Great. Thank you so much.
Adrian Mitchell: Thank you.
Operator: Thank you. The next question is coming from Lorraine Hutchinson of Bank of America. Please go ahead.
Lorraine Hutchinson: Thank you. Good morning. You’ve done a great job of managing the expense structure. Adrian, I was just hoping that you could elaborate a little bit on the $300 million to $350 million of 2024 cost savings. How much of that is slated for reinvestment in your growth vectors?
Adrian Mitchell: It’s a very good question, Lorraine. The reality is that there are going to be puts and takes. But fundamentally, what we’ve been focused on is the incremental value from expense management. As we think about the composition of the expense reductions, about a third of it is coming from gross margin expense and the balance of it is really showing up in SG&A. But our fundamental focus for next year is around profitable growth. And so, we’re making investments in our growth vectors in order to accelerate the top-line. And so that’s a big part of where our investments have been. I spoke a little bit earlier to some of those investments starting in the fourth quarter, but those investments that are going back is all about incrementality on the top-line.
