We went through another cycle again in 2015, 2016, 2017, when we made the move to membership and rearchitect the back end. We also introduced Modern and continue to evolve and make the brand relevant and make sure we’re leading the industry. And we think the work that has begun with the introduction of RH Contemporary, which will triple in size next year from an assorted midpoint of view. And the introductions we’re going to make across the entire portfolio, but the new gallery design that we’re going to unveil, and we’ll go through and remodel and redesign all of our current Galleries and refresh all of those, as well as the platform we’re building globally for the brand is going to once again transform RH and then put us in a position where we create massive strategic separation.
So we’re kind of comfortable being the others and going the other way. So a lot of people are hunkering down right now and slowing down. We’re kind of speeding up. We’re more excited, less fearful. I think we saw this coming. This is not a game that’s the first time we’ve seen it. It’s just different. But our moves over the last 22 years have been very consistent. I think we’re pretty disciplined in the things we do. They’re unusual. When we were opening 50,000 to 60,000 square foot stores, the rest of the industry was closing stores and shrinking footprints and trying to move all their business online. Now everybody is opening stores. And I don’t know, maybe we’re just a little bit ahead of everybody else.
Simeon Gutman: Okay. Thank you very much. Happy Holidays.
Gary Friedman: Thank you. Happy Holidays to you.
Operator: Our next question comes from the line of Steven Zaccone from Citi. Please proceed.
Steven Zaccone: Great. Good afternoon. Thanks for taking my question. I wanted to focus on RH Guesthouse. The last time you’re on the call, you talked about some of the initial interest. How has that performed the first three months that it’s been open? What are some of the early learnings for the hotel? And do you see opportunity to open more of these concepts going forward?
Gary Friedman: Yes. I mean we just opened. We think it’s extraordinary. The feedback we’re getting from our guests is incredible. The feedback we’re getting on the restaurant has been incredible. And so we’re just in early learning period. We’re not — I missed the first time we’ve ever done this. So far, we’re really excited. We’re going to be opening our Champagne & Caviar Bar soon. We’ve got our feet underneath on our new live-fire restaurant. And so we couldn’t be more excited about it. I mean the feedback from our guests is — a lot of people are saying, gosh, how am I going to be able to get in long-term because it’s just not that many rooms. But we’re excited — it’s going to be learnings here that will help us evolve and make ad spend better and yes, so on and so forth.
So, this is just very early, big test. It’s kind of a small thing in a very big organization that if it becomes a big thing long-term, great. But right now, it’s really positioned to be something that helps redefine the brand and have people look at us differently. So, I think it demonstrates the kind of creativity and passion and attention to detail to do something extraordinary. People from the hospitality industry have come and seen it and toured it. Luxury CEOs that have come and toured it, said they haven’t seen anything like it anywhere in the world. So, we just let it kind of unfold here.
Steven Zaccone: Okay, great. Very helpful. The other question I had was on gross margin. So, the first quarter of the business has seen a decline, obviously, on occupancy deleverage. But as we look forward is that the likelihood that you probably see gross margin decline again in the fourth quarter? How should we think about the trajectory from here?
