Patrice Louvet : Laurent, we’ll tag team on this one. A few things on China. First of all, I have to say, I am really proud of our team’s execution, actually not just in China, but across the entire APAC region. And as we talked in prior forums, we see significant near and long-term growth opportunities in China on strong brand building, on relevant product offering and a connected ecosystem expansion in key markets. In Q3, we were up 7% constant currency in China, despite 94% of our stores impacted either by closures or reduced hours or staffing shortages. So it gives you a sense of the team’s agility that I referred to earlier and the ability to kind of navigate that still connect with the consumer while the access is a little constrained.
You are right that we don’t generally comment on in-quarter performance, and it’s only been 3 weeks, but we’ve been very encouraged by the reopening. We are now up and running everywhere, and we’re seeing consumers reengage strongly. So far, I think, double-digit rebound across Mainland China. And we’re seeing a combination of, of course, the return of traffic both on — in our brick-and-mortar and also online and then strong conversion. And why strong conversion? Because the work that the teams are doing on brand desirability in China is really resonating with the consumer, and they’re leaving the brand into the local fabric of the Chinese culture in a way that really sets us apart. If you think about what the Ralph Lauren brand is about, right, it’s understated luxury grounded in heritage and icons.
And that’s a pretty unique proposition. And based on where the Chinese consumers’ mindset is right now, which is maybe a little less focused on short-term fashion and more focused on brands that have a history to have a heritage and have a set of clear values, that positions us very well. Team is doing a really nice job creating our product line up there, and as we’ve mentioned in prior calls, we’re continuing to see consumers there gravitate towards our highest price items actually around the world. And then we’re super excited about the way the ecosystems are playing out in the top six cities that we’ve called out. Those of you who plan to visit Mainland China in the near term, you can visit our new store in Shenzhen, which we opened a few days ago and is off to a wonderful start.
In a store we opened recently flagship in Chengdu, which is also doing quite well. And then this is only about domestic consumption, right? So the other thing that’s going to happen is, we’re going to see Chinese travelers wanting to shop our brand around the world, and we’re in a much better position in terms of brand perception than we were 3 years ago. So I think we’ll be able to benefit from that, and we’re starting to see some of that in Southeast Asia and parts of Northeast Asia for our business. So promising start, excited about the long-term perspective, and we have a very intentional game plan to win with the Chinese consumer.
Jane Nielsen : Yes. A few things to this — giving us confidence in our Q4 guide on gross margins, Laurent. But one is that what Patrice just said, which is we expect China to come back resiliently in the quarter. It’s our highest gross margin country within one of our highest gross margin countries within Asia. So we expect that to be a mix benefit as we move forward in gross margin. We’re also starting to see some of the freight benefits, both the reduction in air freight and some reductions starting in ocean freight. So we’re encouraged by that as a tailwind. But underlying it all is our confidence in the pricing strategy that we have and the mix benefits that we have in our assortment moving forward into the fourth quarter, and that is really the strength along with the consumer perception strength that we see that gives us confidence in the fourth quarter.
