And that is not paid. Now it helps to have paid social go along with organic social, but we’re getting really good at pushing our content not just through our own channels, but into the whole social media world in a very effective way to get new customers into our brands. And so, it’s not just the ad cost spend, it’s the creative spend because in building that incredible content like we did with Stanley Tucci, for example, which continues to be a really wonderful example of a successful collaboration that’s working both in the short-term sales but also in bringing new customers to the brand. And so it’s a great example of the kind of things that are changing, and they’re really different from 10 years ago, when those channels were not available to use.
Seth Basham: Got it. Thank you very much and good luck.
Laura Alber: Thanks.
Operator: Your next question comes from the line of Jonathan Matuszewski with Jefferies. Please go ahead.
Jonathan Matuszewski: Good morning. Nice results. And thanks for taking my question. The first one is on B2B. Just curious how you’re thinking about B2B in the context of your 2024 guide in terms of sales or comp? And relatedly, maybe if you could just update us on, what you’re doing to make that channel more profitable. It seems like you’re doing a lot of good things on the consumer side to take costs out of the business, in terms of less accommodations and damages, but curious, anything to make B2B more profitable? That’s my first question. Thanks.
Jeff Howie: Good morning, Jonathan. We see B2B contributing about 100 basis points to our comp in 2024, which is embedded in our guidance. Here’s what’s exciting. We’re really optimistic about B2B growth as we look forward to 2024. The business was up 1% overall in 2023 with contract up 31%. And while the trade business has been more impacted by the slowed housing market, we’ve seen some recent improvement in that trend. However, we remain focused on accelerating our contract business, and we’re really pleased with the momentum we’re seeing. And here for us, it’s really a growth story. Overall, B2B is slightly accretive to our operating margins. And we just see continued growth as we disrupt this $80 billion piece of our TAM.
Jonathan Matuszewski: That’s really helpful. Thanks. And then just a quick follow-up on your store fleet. Just maybe update us on the mindset regarding store closures. What’s embedded in the 2024 guide? Obviously, a lot of leases up for renewal. Thanks so much.
Laura Alber: Yes. So really exciting story in our retail stores because we’re very successfully leaving certain stores in certain areas and moving to vibrant centers. A great example is Annapolis. I don’t know if you’ve been there, but we moved our WS and it’s right next to a Whole Foods, which is a really different strategy than your traditional retail placement. And it’s really — it’s up to pro forma. It’s up to the previous store and the four wall [ph] is much higher than our average. It’s a really good case of where we work to the landlord to really build a killer store, and we’re paying less and the financials are really strong and the store is great for the customers. And so that’s what we continue to do as leases come up for renewal, there are amazing centers we’re staying in, and we’ve been successful in reinvesting in the right things so that if you’re staying in the center, the stores look really fresh and also serve the customer in the way they want to be served, and there’s new things than when we built stores 10 years ago, new businesses to fund, space allocation.
And so across all of our brands, we’re constantly looking at what’s working, what’s not working and how do we continue to optimize, but also keeping that beautiful inspiring store experience where you go in and we say the music plays, and you’re excited to be there and you’re inspired by the features, and we’ve got great salespeople who help you. And we’re matching that also with very intuitive and helpful tech to help build these rooms, these houses. And just while I’m talking about this, I really just — during this time where people are buying less furniture, we’ve taken the time to really reinvest in how we take our design service to the next level because we know that they’re dying to buy new houses. And when the market switches, we’re going to be there with an advanced platform for design services that we can use and leverage in our stores and also online that I think is game changing.
Jonathan Matuszewski: Thanks for the color,
Laura Alber: You’re welcome.
Operator: Your next question comes from the line of Max Rakhlenko with TD Cowen. Please go ahead.
Max Rakhlenko: Great. Thanks a lot. So first, Laura, can you just provide any more color on your comment that 1Q reads are strong. What brands are you seeing that in? And then just how are you thinking about what brands will lead to return back to growth over the coming quarters?
Laura Alber: Sure, Max. We really do have a strong lineup of opportunities in our portfolio of brands, and we’re really confident in our outlook. Some examples of things that are working, we’re in a color trend phase, and we’re seeing print and pattern and color sell across the brands actually. Easter is strong. That’s good. It’s early. So, Jeff is telling me to be careful with this comment because when it’s early, sometimes it ends a little differently than you expect but so far so good and even shifted. That tells you customers we saw Christmas decor be strong, too, Easter. This is good for our brands. There’s not a lot of people out there that serve in a quality way, the seasonal holidays. And we think they’re wonderful. We love to decorate and entertain and show people how to do that across them.
