Korinne Wolfmeyer: Okay, thank you.
Jean Madar: Excuse me, I would like to – if we have time, I would like to go back to this interesting point of like Lacoste and Cavalli, which are the two new license that just started, we took them over January 1. I think we’re going to see some good surprise on both because the former licensee didn’t put a lot of inventory in the market. And there is from the orders that we are receiving in the first quarter, we see that there is large appetite for Lacoste products and also for Cavalli from the trips that I make, we see empty shelf, and we have to replenish the shelf quickly. So there is – if it continues at the level that we are seeing now, we have a lot of chance to make the bigger numbers than that for Cavalli and for Lacoste for this year.
Operator: Thank you. And our next question comes from Ashley Helgans with Jefferies. Please state your question.
Sydney Wagner: Hi, this is Sydney for Ashley. I was just wondering if you can talk a little bit about what you’re seeing in terms of consumer price sensitivity and maybe also sensitivity to promotion. And then any kind of color you can give in terms of what you’re expecting for the broader fragrance category, promotional environment looking out through 2024?
Jean Madar: Well, I can try to answer. But as I said before, we have seen a premiumization in the market for sure. There is – there are more and more consumer willing to spend more for higher quality fragrance. When I say higher quality, meaning more concentrated fragrance. So instead of buying Eau de Toilette, they will buy Eau de Parfum. So it could be more expensive. We see no real price resistance when it comes to fragrance. We see also worldwide more people buying larger size, which is also a sign. Our fragrance come usually in three sizes, let’s call it, small, medium and large. More than 50% of the sales are in the large size. So this, of course, helps the business. It has not always been like that so – and we see this trend continue. We see it in a brick-and-mortar business and of course, in the very important e-commerce business. Michel, you have something to add?
Michel Atwood: Yes. No, I think I would say the market has been generally very strong. So even if there is – if there were to be any price elasticity related to pricing, we’re certainly not seeing it or there’s a very strong underlying trend that’s kind of pushing the market up that would be offsetting that. And on the promotion side, we’re not really seeing any significant increases in the promotional levels, typically holiday where you get your normal gift sets. There are some various events throughout the holiday season to facilitate sell-through, but we haven’t really seen any significant increases in promotional activity either.
Sydney Wagner: Got it. That’s helpful. And then just one more from us was any updates you can kind of give us on the travel retail channel and what you’re seeing there?
Jean Madar: Yes, travel retail is really back. We have all the operators, the largest operators and there is less than a dozen of them going back very strong with a lot of programs at a higher price and in Europe, in the U.S. and in Asia except China, we will see a nice increase in our travel retail.
Sydney Wagner: Got it, thank you so much.
Operator: Thank you. And our next question comes from Hamed Khorsand with BWS Financial. Please state your question.
Hamed Khorsand: Hi. Good morning or good afternoon, Jean. The first thing I wanted to ask you is are you seeing any difference? Can you hear me?
Michel Atwood: Yes.
Jean Madar: Yes.
Hamed Khorsand: Are you seeing any difference in your relationship with the retailers and what’s going on with you going direct and how beneficial that is for you? Are they buying more because you’re having – establishing relationship? How is it different?
Jean Madar: I am not sure. Michel?
Michel Atwood: So let me try to take that, and then, Jean, you can maybe fill in. I mean, obviously, there’s always a benefit in going direct because if you go direct, you can obviously pick up a piece of the overall value that is out there. If you can do it, obviously, efficiently. The second benefit that you get is effectively you’re closer to the business, you’re closer to the pulse of the business. When you’re selling through a distributor, you don’t necessarily have as much visibility on what the retailers are doing. Obviously, you have ongoing conversations with your distributor, you stock – you track stock in trade, you track their stock levels, you look at offtake. But when you’re one step closer to that consumer to that retailer, it definitely helps the relationship.
You also are the one talking about your brands. And obviously, we always know how to talk about our brands, even if partners are also very well trained. We definitely are one step closer as well. So I think all of that just creates positive momentum and inevitably kind of helps us.
Hamed Khorsand: Okay.
Jean Madar: We have direct relationship with retailers in many countries. And of course, we can respond much more faster when you have a distributor in the middle for sure.
Hamed Khorsand: Okay. And then have you changed up any of your time line for new releases this year? Or are you staying put?
Michel Atwood: Yes. I think there was some – if you really look at the business overall, typically, what you see is from a seasonality standpoint, I mean a lot of – if you look at a stable FMCG business, it’s pretty much everybody’s buying every quarter, roughly a quarter, a quarter, a quarter. What you see on the fragrance business, it’s much more skewed to the second half of the year. And if you look at what we did this year, this year, we are about roughly – 47% of our business was in the first half and 53% was in the second half. Normally, it’s more like a 46-54 split, and this year was a bit of an outlier because we had a very, very strong Q1 last year with a lot of innovation, particularly on Mambo and Jimmy Choo. So this is one of the reasons why we’re guiding to a slightly slower growth relative to last year. It’s more driven by seasonality of this market and this industry, which was a little bit off last year versus what we normally see.
