Shelly Ibach: Yes. Peter, thanks for the question and the opportunity to clarify. So, it really was around three different things, and all consistent with the perceived price perception, as the consumer moved into a place where she was very scrutinizing of how much to spend. I’ll use the example of the selling process in the store. When you came into our store during that timeframe, we were selling the full smart bed system first. So the selling process showed the consumer or the customer in the store, both the smart bed and the adjustable base. And she fell in love with that full system. And the quote ended up being very high, because it was inclusive of the smart adjustable base. So, one of the big changes we’ve made since that time is to sell the smart bed first, which is what we historically have done.
When we introduced Climate360 a year ago, the Climate360 comes with the smart adjustable base. And we had great success with selling it that way. As we introduced the full line, we also included that full system for — in that full solution for our customers. And we have found that since we went back to first and foremost understanding where the customer’s budget is and selling the smart bed and meeting her budget, that has made a significant difference in conversion. In a similar manner, our online experience now compares the smart beds first and then goes through a later step of adding a base, so that the price doesn’t get too high too fast, especially for the consumer in this environment. And then third would be messaging, our marketing messaging getting back to just our very simple value proposition around adjustable firmness and temperatures starting at $1,000, so that we’re very competitive, and helping reduce that perception of the smart bed is way more expensive than it really is.
Peter Keith: I guess, I understand the effort to reduce the cost base, but it sounds like if you’ve adjusted the sales process, sales have gotten somewhat better. I guess, why the pivot to now closing a bunch of stores and then does this cap what would be a future store opportunity where maybe we won’t be growing stores anymore?
Shelly Ibach: Yes. No, it absolutely doesn’t cap the future opportunity. The macro volatility continues to pressure consumers. We obviously were surprised by the shift in consumer behavior in August and September. It’s difficult to predict these changes, and we need to make sure that our operating model is more durable for a broader range of macroeconomic situations. I don’t — sitting here today — I mean, we went into back half expecting a recovery in the mattress industry, and that’s not what we’re experiencing. And we want to make sure that we have the business model in a place that is greater, has greater durability and that we’re completely focused on generating cash, paying down our debt, returning the business to a strong profitable position.
And at the same time, being well prepared for the future rebound and getting back to double-digit EBITDA. So, these are the actions we’re taking now to get our fixed cost structure down. And they’re not at all going to keep us from realizing greater sales in stores in the future. We’re being opportunistic on the stores that we’re selecting and the lower performers. We also have developed some really great digital sales tools that over the last couple of years since the pandemic has started. And we expect to utilize those in our other stores and our online operations to be able to generate a greater transfer of sales than we historically have done, even though it was very high historically, it’s been over 30%. We expect these tools to help us make that even greater.
And again opportunistic in our approach, we’re looking at all the DMAs and really making sure that we have other ways to serve our customers in these markets.
Operator: Your next question comes from the line of Brad Thomas with KeyBanc Capital Markets. Please go ahead.
Brad Thomas: The first I just want to ask about, a follow-up on sort of pricing, and I know, Shelly, you’ve explained that you’ve changed how you’re selling. But can you talk a little bit about the need or the potential need to do more promotionally and how necessary that might be for you now and what your plans are from a promotional standpoint?
