Steve Emerson: Could you talk about some of your objectives next year? Some of the metrics you hope to be at? And also, what percent of your revenues in the US are now met with fairly quick or domestic inventory?
Antonio Achille: Okay. Thank you, Steve, and nice to reconnect with you. So let me start. I will answer specific to your question, but let me start answering to a question, which is a bit a different time frame, which is where we see Natuzzi mid-term, because I believe that under this difficult market condition, every 1 of us has the natural tendency to focus more on the problem and the issue and to forget the dream, the part of the dream. So I will answer first there, and then I go back to next to you. So the dream is to bring Natuzzi where it should be and deserve to be. Let’s remember that according to independent survey, which means we are not doing those, Natuzzi as a brand awareness among international brand, position it first in US market, first in UK, first in Spain, second in China.
So that’s to say the strength of the brand. Clearly, the brand is much larger than today’s revenue. So our ambition is simply to bring the revenue where the brand is. Imagine what would be in terms of investment into the work, build this brand. And there is, by the way, a second element, which you cannot buy, which is the heritage. This is a company where the Chairman has founded this company 65 years ago. Again, this positions Natuzzi in the bucket of if we do an analogy with the fashion of Armani, Versace, so a company which really have created the market. So that is the dream and the vision. So let’s go back now talking more specifically on next year and US quick time portion of sales. Next year, we are finalizing the budget. It’s always in circumstances where the market still for everyone, and I believe you read the press release of our peers, is not providing obvious sign of recovery.
We are building a business case, which privilege resilience and solidity of our fundamentals. Having said that, we are prioritizing investment in the direction I mentioned before, which is retail and restructuring. If, as we discussed before, some of those non-recurring sales of strategic asset happen that will provide a strong acceleration. Otherwise, we’ll be quite prudent in the first part of the year in terms of new investment in retail to wait and see what is the development of the year. So that is how we are entering next year. So in terms of KPI, we were still monitoring the KPI that certified that we’re moving in the right direction long-term, which means sales of branded product versus total sales, sales of product in retail channel versus sales in wholesale, marginality, number of recurring customer, average order ticket.
So KPI that testify we are moving in the right direction from a P&L and an equity perspective. In terms of accelerating investment, I suggested our Board to be doing a budget which is relatively prudent in terms of new investment in the first part of the year ready to accelerate if the condition allow it or if any of the non-recurrent asset transaction materialized. Just to give you, I will say, an answer of next year by putting in the perspective more a mid-term journey. On a specific question on quick program or let’s say, stock inventory, Jason, maybe you want to take it.
Jason Camp: Happy to attempt to answer your question, Steve, and make sure I got it right. So from, let’s say, the retail side of the business, when I combine both brands, I would estimate that a little over 20% of our written orders come from sales that are already available in the US quick time, a floor model change, what have you. And then about 75% are special ordered today on the retail side. I would say on the wholesale side of the business, the — our retailers are ordering a much larger percent, let’s say, from us directly, but they’re — but they often provide their own stock investments. Our largest customers build their own stock. And so I would guess that the stock to special order ratio on the wholesale side of the business for their customers is maybe 60% stock, 40% special order from a blend standpoint, if I had to guess. Mr. Natuzzi, it sounds like you think that’s reasonably close. But — so I hope that answers your question.
Steve Emerson: Thank you I was looking for more concrete metrics like how many US Natuzzi stores do you expect to build next year et cetera?
Antonio Achille: So, Steve, as I said, I cannot give you a figure because it depends on how the year will develop. So let’s say we see at that point I point is I don’t give a precise figure, but it’s above the book value, which is EUR10 million. Let’s assume we said significant about the number. As I said, we’ll be primarily invested in the stores. In US, an average store’s net top capital contribution by the landlord is around $800,000. So you can imagine that, that can provide a significant acceleration of turbo boost. If we need to sell financing, those openings, leaving apart way to increase our capital available apart from selling non-strategic assets, of course, the speed of development is lower. In terms of full potential, again, we have a number in our plan.
But since we disclosed the plan, I would use analogy from the other competitors. I think the company which is closer to us in terms of not necessarily operating model, not positioning and being international as, which is similar in terms of price position actually on both Natuzzi Italia, 40-store, above 40 store in US. So I think the space different for us to more than double the presence of Natuzzi Italia store in US. The speed we arrive to that number depends on our ability to invest but also in the fact that we don’t want to open store. We are not eventually happy by as implicit question as Dave mentioned before. So we’re really focusing very much also on organic growth to make sure that every store is really supported. So I know it’s maybe a long answer, but to shorten it, I cannot give you a number for next year.
