Operator: Thank you. Our next call from Jim Duffy with Stifel. Please proceed with your question.
Bracken Darrell: Hi, Jim.
Jim Duffy: Good afternoon. Bracken, I was hoping you could speak for a moment about your vision for the organizational structure. The establishment of the commercial organization seems like an incremental layer to the structure, at least in North America. Are there layers within the organizational structure to be streamlined to speed efficiency that will coincide with this?
Bracken Darrell: Yes. If you think about it, we’re running, like, effectively five different North America organizations today for the various brands and that includes quite a bit of duplication. And while you’ll have one person over that now, we should get consolidation of some of it underneath it. So – and I expect it to be a much more efficient approach. It will also make sure that you know, we’re really good at executing in stores. And one brand, we’ll move that quickly into the others where we’re doing it in Europe, it will come into the U.S. So I just see this as a win-win.
Jim Duffy: Great. Thank you.
Bracken Darrell: Thank you. Thanks, Jim.
Operator: Thank you. Our next call is from Janine Stichter with BTIG. Please proceed with your question.
Bracken Darrell: Hi, Janine.
Janine Stichter: Hi, everyone. Good afternoon. Hi, Bracken. Wanted to ask more about the timeline for the change at Vans. It sounds like the playbook that’s been in place is still very much there, but now there’s just more of a sense of urgency. Wanted to understand how much of the pace of change can be done by things that are organizational or internal? And then if there’s anything that can be done in terms of the lead times in the product pipeline, my understanding is that it’s always been somewhat of a longer lead time brand, I think, around 18 months. So anything that can be done just to get the product to market quicker? Thank you.
Bracken Darrell: Yes. Thanks for asking that, Janine. There is that – just a reality of this market of this business that there are certain time lines to bring products to market, especially shoes, footwear it is what it is, although parts of that footwear business can come to market faster than most. So I’m not going to commit to you that we’re going to suddenly accelerate all the lead times to market, at least not yet, although I think that’s a very worthy goal. But I do think there are other things we can do to execute better and probably do that a little faster. And one of them is an outcome of what we announced today, having one commercial organization that just moves with the cadence in a process that rolls across our entire business and takes the best practice in places that are — where we’re really performing well in vans and brings it into the U.S. market, I think, can help.
So – as I said, stay tuned. There’s a lot of work to do on Vans, but I’m really, really excited about it, and I’m excited about getting in the middle of it, and I love the team over there. So, I think it’s going to be – we’ll be – I’m sure we’ll be talking about this every quarter.
Janine Stichter: Great. That’s helpful. And then if I could just ask a follow-up. We noticed some of the changes on the classics. I was wondering if that change helps or at all if you’ve seen anything there? And just how to size up the magnitude of how broad that price change was?
Bracken Darrell: Yes, it has. It’s been pretty broad across certain classic styles. It was about $5 in four different styles. And I think it was really to try to just reset – Vans – those Vans Classic also were always a good value. And I think we’re in an economy where our value matters. So we did see a lift. I don’t think it was broad enough to really notice from our P&L standpoint, but I think it sets the stage for having us be the right kind of price point. And we’re not just one price more. So you also have the ability to trade up and down from there, but mainly up. Do you want to add anything to that, Matt?
Matt Puckett: No. I think you got it, Bracken. I mean we’ve seen a little bit of uplift in terms of the sell-through velocity on the back of that. But it’s a few weeks in. It’s relatively – at this stage, hasn’t changed the overall outcome, all that materially. But ultimately, it’s the right thing to do in our view in terms of the opportunity to increase velocity. And it will also help us clear through some inventory a little more quickly, which is an important aspect, of what we need to do in the wholesale channel as well.
Janine Stichter: Perfect. Thanks so much.
Bracken Darrell: Thanks, Janine.
Operator: Thank you. Our next question is from John Kernan with TD. Please proceed with your question.
Bracken Darrell: Hi John.
John Kernan: Excellent. Thanks for taking my question. Hi Bracken. To go back into the Vans turnaround, obviously, there’s going to be some new leadership that you bring in. But how do we think about the top line and the margin opportunity? Are there points of distribution that needs to be shut down? I know there’s is around 730 stores. There’s quite a few wholesale partners globally, particularly in the U.S. How should we think about managing the top line and also the margin?
Bracken Darrell: Yes. I think there’s always cleaning up to do, especially when the business is in ahead a decline period, you always have to go through and clean up the excess distribution, let’s say, we are shutting down stores. We’ve shut down – I don’t know the exact number, Matt may have top of his head, we have absolutely shut down stores, and we – and that’s a weed and feed process all the time. We’re actually opening some stores, but we’re also shutting down more. And I think from a wholesale distribution standpoint, I don’t think there’s anything specific I would point to. But we’re going to continue to evaluate the distribution. It’s obviously such a critical part of this business. But I don’t think those are really the answer. I think the real answer is we need great innovation and great execution.
