Mitch Kummetz: Okay. Great. Thanks and good luck.
Mike Stornant: Thank you.
Operator: Thank you. Our next question comes from Abbie Zvejnieks with Piper Sandler.
Abbie Zvejnieks: Great. thanks for taking my questions. How are you navigating fueling growth in the Active Group as the state becomes increasingly competitive? And particularly on Sweaty Betty, do you see the same strategic benefits that you did at the time of the acquisition? And how are you planning a bigger expansion there into the U.S?
Brendan Hoffman: Well, I think that’s one of the growth levers we have with Sweaty Betty when we bought it and certainly feel now, I mean, we — our main focus right now is stabilized in the U.K. market. That’s where we’re opening up the stores. I mean that’s where their foundation is. A year ago, I would have expected to have opened up a few Sweaty Betty stores in the U.S. But just given the climate, we decided to set focus on the U.K. market, while we focus here in the U.S. on our wholesale business. I think I mentioned last time the nice relationship they have with Nordstrom as well as some other specialty stores, and we moved them into our U.S. warehouse. Previously, they have been servicing it from the U.K. And while we had some hiccups in the fourth quarter, we think that’s going to, in 2023, allow them to be much more agile in terms of servicing the U.S. wholesale market, which we also believe will give them exposure to drive more U.S. e-commerce business while we contemplate what a store rollout looks like there.
I think in terms of the broader question of the Active Group in terms of the market trends you talked about. As we mentioned, as I mentioned in my remarks, two of our biggest priorities for the company are Merrell expanding in Lifestyle and Sweaty Betty moving Beyond the core. And so I think that — and by the way, the overall trends in these categories are still very strong when you think about where we were a few years back. So we feel like there’s ample room for us to grow — continue to grow these growth brands and ultimately will come down to product and innovation, as I mentioned earlier Abbie I know you’re a Saucony fan. We just had a tremendous launch last night with the Endorphin Elite. So I think that gives us even more confidence, quite frankly, despite the environment still being a little bit too promotional that when you do bring in newness and innovation, which Merrell does, of course, a great deal of as well, the customer is going to respond.
Abbie Zvejnieks: Great. And maybe just a follow-up on that bringing in new products such as Endorphin that drive that consumer demand, like while working through inventory, how do you balance that? Do you think that limits top line growth? Or are you just prioritizing that on like a brand-by-brand perspective? Thanks.
Brendan Hoffman: Yes. Well, I think for sure, on a brand-by-brand perspective, making sure that where we see the growth is where we’re flowing the goods more aggressively. But as we said even three months ago, a lot of the overage in the shoes and our inventory is in core product. I mean that was — when we made this 1.5 years ago to try and chase sourcing would be anomaly shutdown, we, for the most part, did it in core products. So that’s where we don’t have to bring in product. The newness is still able to flow. We have some newness and collaborations across the brands that we didn’t get here in time last year. So a couple of the brands are actually chock-full of great collaboration. So we recognize that newness and innovation is what’s needed to help drive the core. So I think that hasn’t been as challenging as maybe it sounds, given the approach we took.
