Simeon Gutman: Hey, everyone. Hey, Gary. Hey, Jack. Gary, has your approach to the, I guess, the next 12 months of promotional posture, is it changing, does it €“ will it change if the environment gets worse or we know what to expect in terms of pricing and promotion from here?
Gary Friedman: Yes. Look, we have €“ as we said, the biggest collection of new products in our history coming through. So we are going to have to €“ we are going to have to clear existing products, right. So there will be some promotional activity and clearance activity in the business as we always have, that may get bigger. And also in our view because of the uncertainty in the market, we may decide to just move stuff through our outlets and online just faster than we have made normally just to turn inventory €“ non-strategic long-term inventory into cash, right and position us to have maximum optionality during these times. So we think leading the business with a cash focus is really important. There is going to be opportunities that we probably shouldn’t imagine that might unveil themselves whether it’s from a real estate perspective, business opportunities that might exist, ability to accelerate our business in different ways, whether it’s as we mentioned kind of what I’d call, I’d always call interior design offices where if you stop and think about our business, interior design is really something that elevates and amplifies our product.
But we have become really the largest residential interior design business in North America and likely the world. And it’s become more and more important to our business long-term, attracting the very best people in this industry that are aligned with where we are going, creating incredible offices and spaces for them to approach business in versus maybe having to always be in a retail store. So, our design studios are going to kind of thread a new needle, I think in the business. You will see the first one in London for community concepts and we will have some other ones that I think will pop up relatively quickly. But I don’t think it €“ we are in a really good position to play offense, right. And that’s what you want to be in. Like our €“ there is no risk here to our balance sheet.
There is no risk here to our operating model besides like, hey, we make less money. Got it, we made a whole lot more money during COVID and we cash that away. So we’re just in a great position. So I’m not worried about exactly where our business is today. And I don’t mean that it sounds like, like we’re not focused on it. We’re just focused beyond this next 12 months. We have a lot of things that we’re excited to bring to life in the next 12 months. But it’s not €“ like think about it this way. Did you see any of us self-stock at $700 a share, have you seen me sell stock when our stock was $700 a share?
Simeon Gutman: No.
Gary Friedman: The reason I didn’t sell stock at $700 a share. We believe it’s going to be worth significantly more than that, right? So we’re just playing a very long-term game. And if we’re right, we’re going to create extraordinary shareholder value in this company. We’re going to do something nobody else has done. So expect this to play our game if something really crazy happens, I can’t imagine it, something worse than coded that shuts down multiple parts of the economy again. we may have to improvise adapting over time. But based on what we can see and anticipate that might be wrong today, I think we’re good with the game we’re articulating the strategy that we’re articulating.
