And I just want to highlight here that Japan as a market is a very big running and sportswear market. It’s an important market. And we’re doing very, very well in Japan. We’re super happy about the growth rates. We’re very happy with the performance of the On stores and our e-comm engine in China. And we couldn’t be more thankful to the work that the team has done over the last couple of years in Asia-Pacific.
James Duffy: Thank you so much.
Operator: And your next question comes from a line of Jonathan Komp from Baird. Your line is open.
Jonathan Komp: Yes., Hi, good afternoon. Thank you. Martin, I wanted to follow up with a clarification that the distribution expense, I believe in the first half of the year, deleveraged by about 130 basis points. Could you just maybe quantify the extra storage fees that were included in that? And then when would you expect those to start to wind down here?
Martin Hoffman: Hi, Jon. There are two effects in that increased number. So, the first effect comes from — we communicated this in the past, from our projects to build additional warehouses, which are fully automated. So, at the moment, we basically started to rent those warehouses and they’re currently being built out with the automation solution. And this is already driving some additional cost. And the second element really comes from the fact that we had those high inventory positions. We had the inventory flowing in earlier than expected. So, we had to rent some additional warehouses to unload the products from the containers. And that’s also reflected in the numbers. Now, the root cause for the second one is done for the rest of the year.
So, we are not having those temporary solutions anymore. But we are still expecting to see the additional cost for basically the double warehouses until they go live. And in some cases that go live, that is not before early 2025. So, we will expect to see a bit increased distribution expenses compared to where we were in 2022 before we then see the operation leverage coming from the automation.
Jonathan Komp: Okay, that’s very helpful. Thank you. And then one follow-up, longer-term question. When I look back two years ago, roughly to the IPO, you achieved many of your financial targets set at the time more than a year earlier, or even better in some cases. So, as we think forward, just wondering how you are thinking today about the right pace for growth for the brand. And would you expect top line to eventually settle closer to something like 20% or 25% growth as you slow the door growth rate in wholesale? And just how should we think about performance versus lifestyle if you’re targeting one of those to grow faster than the other? Thank you.
Martin Hoffman: Yes. As you said, we have exceeded all the targets or most of the targets that we have given at the IPO, which was also the last time that we gave a longer-term update. So, we feel that On clearly is a very different company today, a different state of our growth curve, different level of maturity. And that’s the reason why we decided to do the Investor Day on October 4, where we really want to highlight and talk about the points that you mentioned around our growth strategy, about our innovation, sustainability, but also give everyone the opportunity to experience the culture that we see in our offices around the world. So, let us put a lot of that information into the Investor Day.
