Antonio Achille: Okay. I will start, and then I will ask maybe Jason or Piero to add finer details. When we open a new store, there is a very careful process, which include a geo-market study to make sure that the catchment area, the agency in terms of other brands are really what constitute a solid base for operating a store. For us, it’s a very strategic decision. And that decision includes our business plan, our five-year business plan, which should show breakeven between 14 and 18 months. That is our strategy. Of course, there is always a on phase because as in any business initially you have not the full benefit of the operation while we have the full impact of having a team in course. So that’s a bit as a principle. So those stores, they are still in this ramp-up phase. But maybe, Jason, you can provide if you have already rating and otherwise not care as it some more precise figures on those five new opening in 2023.
Dave Kanen: Jason, if you could help on that. Just I’d like to know of the new stores, how many of them did not contribute in Q3? Just so I could model going forward, what the incrementality is, if anything?
Jason Camp: Sure. So it’s — I think, first, important to remember that these stores are all largely based on a special order and import model. So in our — there’s definitely a timing difference between what we call written orders into our factory versus delivered revenue, which really begins to flow on a kind of more regular and normal basis, four to five months into the opening of the store based on our import model outside of any locally stocked product that we feature in our Quick Time assortment. So for all of these recent openings, I think it’s — as you’re thinking about your models, you should really be thinking about early ’24 to more materially impact our North American revenues.
Dave Kanen: Okay. So those five stores, that was very helpful, Jason. So in your clarification, what you’re saying is you’re taking written orders right now, but they don’t show up in revenue until five or six months later when product is shipped. Could you give us — that’s very helpful. Can you give us a flavor for — or to quantify the written orders that you’re seeing at the new stores and if they’re performing up to your plan?
Jason Camp: Sure. I would say that when I step back and the real estate [talent, the store design] (ph) against, let’s say, a lot of our legacy locations, I think we’re very proud of the work. As Antonio was mentioning, even on the written side, when we enter a new market, we’re hiring largely a new team. And we’re definitely seeing that our stores ramp to fully mature and typically year two is stronger than year one, both historically and what we’ve seen over the last couple of years. So we haven’t really been disclosing individual store volumes, and I’m not sure that I’m prepared to do that today. But I think we believe we’ve built great additions to the US fleet here.
Dave Kanen: Okay. Well, that’s — it’s helpful to just understand the cadence of revenue recognition and that we have a nice opportunity in front of us. And then if I could pivot to a question for Silvestri, I see — I guess the encouraging a bright spot here is on such soft revenue, the operating loss was quite small, and it appears you’ve done a great job of driving down selling expense and administrative expenses a little bit. Could you give me, Silvestri, a sense if and when revenues do increase? Let’s say, theoretically, we increased revenues by $15 million back to $90 million, okay? How much would selling expense go up? How much is variable? If you could help me understand that up to $21.6 million? So on the next $15 million, how much does selling expense increase?
Carlo Silvestri: Okay. So regarding the cost discipline, if we increase the volume, let’s say, that our numbers already show, as of today, all the fixed part, including in our selling and administrative expenses. So if we increase on the same basis in terms of network, the sales, it will only go up by all the variable part related to the rent and the sales commissions and the transportation costs. So let’s say they could go up by 20% of it around that range.
Dave Kanen: So selling expense would increase about 20% if we had a $15 million increase in revenue?
Carlo Silvestri: Yeah.
Dave Kanen: And administrative expense should remain flat?
Carlo Silvestri: Correct.
Dave Kanen: Okay. That’s helpful. So I mean, it shows that when you get that flow-through on revenue, there’s quite a bit of leverage in the financial model to generate profit. Okay. And then the last question, Antonio, if — you called out specifically that written orders have flipped to positive versus the last 15 months. Could you give us — without being completely granular, could you be — give us a little more color on what that improvement looks like in terms of percentage or magnitude?
Antonio Achille: So it’s single digit, strongly, if we look across the branded versus the unbranded, single digit, but it’s consistent. And geography wise, I will say, more recently, US has been more dynamic. The other geography, which has been — but that is not reason because they have been more resilient during the year are being emerging market of Central and South America. This also gives me an opportunity which goes beyond your question, Dave, to comment a bit on China. China, as you know, is going through a very different paradigm when it comes to consumer product than before the COVID. I would say not only the furniture, but we say all the branded even high end and luxury, they are being very, let’s say, gloomy this year.
