Perry Ellis International Inc. (NASDAQ:PERY)
March 12, 2013 3:40 pm ET
Oscar Feldenkreis - Vice Chairman, President and Chief Operating Officer
We're going to get started with the Perry Ellis presentation. I'm very pleased to have Oscar Feldenkreis, President and COO of Perry Ellis; and Anita Britt, CFO of Perry Ellis. And I'll turn it over to Oscar for some comments, and then we'll do a Q&A.
Good afternoon. Thank you for staying and participating. It's much nicer here than it is outside, that's for sure. This is our brand portfolios that represent about 80% of our total revenues. These are our key lifestyle brands. Perry Ellis is about 30% of our total revenues, amounting to about $800 million of retail. Ladies', which is compromised of Laundry by Shelli Segal, Rafaella, C&C, is 15% of our total revenues, about $325 million at retail. Men's Sportswear such as Nike Swim, Original Penguin and Axist is about 15% of our total revenues, $300 million at retail. And very exciting in our position on golf, which is about a 20% of our total revenues and $500 million at retail. And the brands here are Callaway, Grand Slam, Ben Hogan and PGA TOUR.
Perry Ellis is a modern lifestyle brand. It currently has the #1 dress pants in the classification department, in most department stores across the United States. It is the #1 belt brand in department stores and as well as the #2 wallet brand in leading department stores as well. We currently have distribution in over 1,500 retail doors across United States and Canada, with over 40-plus Licensing partners across the globe.
For fiscal 2014, our performance are plus 9% on comparable store basis, driven by the brands' successful product and advertising initiatives. For 2012, PR and editorial placements delivered over $350 million impressions, and that's with our new Very Perry advertising campaign that has been extremely well received.
Our growth strategy is to drive profitability at retail, make sure that we're in the right doors, we have the right amount of inventory and focus on those doors and turning our inventories much faster. As well as the introduction of Perry Ellis America into the second half of this year in about 200-plus doors, and we're very excited about that because we'll be able to really talk to the Men's consumer from work to casual wear. And as well as expanding into new doors, such as Bon-Ton and other retail partners that we're talking to right now.
E-commerce is a big initiative for us, as we -- as this all-important channel of distribution, not only on the brick-and-mortar side but as well as direct-to-consumer and as well as international, with the possibility of expanding into Perry Ellis America.
Original Penguin is a cool and distinctive and fun-loving brand. It's iconic with the Penguin trademark. It is our brand that really talks to the millennium consumer. That consumer today is a $70-plus million -- million group, strong group, which are heavy spenders and are not yet in the prime spending periods of their lives.
Strong domestic and international presence, with over 900-plus stores across the United States, Canada, Latin America and Europe, over 17 Licensing partners and distributions agreements across the globe.
Our focus in our growth for this coming year is direct to retail expansions. We are currently planning to open up between 4 to 5 doors per year, and we currently have already signed the 4 to 5 leases that we have up here currently right now.
E-commerce is a big opportunity for us. It's a very strong business that we currently do today on the direct-to-consumer and as well as the business that we do with Piperlime and as well Zappos and Amazon and other e-com sites.
Licensing continues to be a great business for us and income producer for the brand, as we expand the brand and make it stronger.
Wholesale, we will continue limiting our distribution, with making sure that we focus with retailers that could understand the lifestyle and does justice to the brand by making sure that they carry the product in its full total.
On the golf side, we are the prominent golf ambassador to retail. We sell all channels of distribution and we have a very strong mix of owned and licensed brands. We currently service 14,000 retail doors. We have a growth rate of 27% compounded annually over the last 3 years. And we currently -- the brands that we service this channel with is the PGA TOUR brand, Ben Hogan, which we own, and we just recently started delivering to Walmart in 2,000 doors. And the reception and productivity has been extremely well received at retail. As well as the Callaway brand, which we've been partnering with them for the last 3 years. Grand Slam, which is a proprietary brand that we do with Kohl's, and it's in all doors, as well as the Original Penguin brand.
This is basically our players that wear our product on tour. So in the PGA TOUR, we have these 6 golfers. Under Grand Slam, we have D.A. Points, Original Penguin is John Huh and Ben Hogan is Marc Leishman. I don't know if you saw the Cadillac World Champion this weekend, but Jason Dufner did extremely well and so did John Huh.
As we look to the future in the next 3 years, we see continuous growth in the golf channel. We see that golf within the next 3 years should be a $350 million-plus business opportunity for us. And how we're going to get there and continue the growth is by expanding into ladies', which has done extremely well currently at retail, and we continue to find new partners and retail channels with the ladies' business, as well as expanding into the Big and Tall product and fitted. Fitted today, as you see the golfers today are all wearing slim, fashionable products, so everybody wants to dress and be like them. So this is becoming a much more important category, as well as compression is becoming much more important in the golf world and expanding into accessories, such as belts and other -- small other products as well.
On the geographic side, we will continue to expand into the big box, which is the all-important sporting goods channel, green grass, off-course golf specialty stores and as well as continuing to gain our momentum in the tournament side and the corporate ASI side, which is a big opportunity in the golf area.
On the international side, we have announced an agreement with the PGA TOUR, which allows us to expand into Canada, Mexico and Latin America. And as well as we go, we will start embarking into the U.K. and Asia and other continents with our golf business.
As you saw, we have a very strong marketing program where we have today golf and bachelors of our key brands. We have developed a Ben Hogan 2-tier distribution concept, which will allow us to be in Walmart and as well as be in better retail doors. And we have -- we will be announcing a partner with the better retail store with the Ben Hogan premium brand, and as well as expand on Licensing partnerships with some of our licensees.
Our direct-to-consumer, we're targeting 100% growth for fiscal 2014 as it is a big opportunity for us, the development of a direct site. Currently today, we do not do any e-com business on -- within any of our golf brands, and that's something that we're working on and we will be embarking into 2014, and as well as the infrastructure and technology investments to go after these platforms.
The Rafaella, it's a focus in understanding the needs of the modern woman by creating smart, beautiful clothes for work and life. We currently are in 1,000 retail doors, 59% of our business is generated out of department store, such as Bon-Ton, Boscov's, Lord & Taylor and The Bay in Canada. Special markets represents about 22%; wholesale clubs about 8%; private label is about 8%; and e-commerce, which we do on our own, is about 3%.
What is our growth strategy? It's transformation into a true lifestyle brand. We will be adding Rafaella dresses, which we currently do not offer today, as we're leveraging the team that we have currently today in Laundry and as well as expanding into Rafaella Sport. We've seen retailers embarking and being very successful on the whole activewear side, so we believe that Rafaella could be a great opportunity to make part of its lifestyle the activewear component.
As well as geographic expansions into under-penetrated markets, we have developed a Hispanic marketing initiative, and we will be marketing the brand into the Hispanic market with Vane Sailes [ph], Bonogar [ph] And also, we have signed up a very famous Hispanic television like the Vanna White of the Hispanic market, and we're very excited about that. We're using her on our website, and it should be -- it's creating a lot of excitement with some of our customers, as more and more retailers are starting to go after this market, as well as increase our Licensing opportunity within the Rafaella brand.
Laundry by Shelli Segal has been a phenomenon since the acquisition from Liz Claiborne 3 years ago. It's a wholesale contemporary dress brand. We are currently in over 400 better department stores and better specialty stores across the United States. We currently have licensees in outerwear, girls' dresses, fragrances, swim, sleepwear, loungewear, accessories, jewelry and home, and as well as our growth vehicle for this coming year would be contemporary sportswear, which we would launch in probably latter half Q4 going into Q1 of 2014.
We will be developing a diffusion brand under LBD to go after markets that currently cannot afford the Laundry by Shelli Segal, since Laundry is really starts at Neiman Marcus, Saks Fifth Avenue, Nordstroms and Bloomingdales, and we feel that there's an opportunity more in the price point. And as well as expansion into Licensing categories, such as handbags and footwear.
So I guess, now we have Q&A.
Great. Maybe Oscar, we could start -- let's start with the Perry Ellis brand and maybe remind us or tell us about the strategy. I think you're investing a lot in the brand right now, a little bit of repositioning of it. How do you get -- I guess the broader question is walk us through how you get the AURs for Perry Ellis up and how you do that with the existing customer base and the challenges there. And if your floor positioning changes over the next couple of years as you're doing this. And I think there's been -- I can't remember if it's connected to Perry Ellis but the New York offices coming together and maybe just paint the picture for us on what's going on there.
Can you hear me on my mic? Yes? Well, basically, last year, about 1 year ago, we started to bring in a brand-new team in Perry Ellis from a president to creative director, sales organization, planning organization. It took us about 1 year. We started a new campaign called Very Perry, and the reception has been very strong. As well as we changed completely the direction of the brand, making it much more colorful, younger, going after the slim fit initiative and, of course, the strength of the slim fit, which is the fastest-growing piece today in the menswear market. And the reception has been very good. How do you get AURs up? Well in reality, we were shipping probably too much goods into the stores and the markdown rates were substantially high. And of course, this causes your AURs to be very low because you have to promote yourself in order to liquidate most of your inventory. Our approach for spring '14 and going forward, our current on-hand inventory at retail is about 30% to 25% is last year's residual holiday inventory. So we're a much, much cleaner basis versus last year was close to 70%. So this allows our AURs to actually go up, be much more profitable, reduce dilution and have a much, much more cleaner business as we look to the future. And the initiative has actually worked. We're less promotional. We're turning faster, which is really key. And what department stores are looking for today is really flowing the inventories much, much better, turning their inventories better and as well as raising AURs and giving a better value to the consumer, because as we all know, we lived basically in 2011 with a lot of inflationary issues on the sourcing side and a lot of that has come down, even though labor costs are definitely going up, because we're seeing shortage of labor throughout China, which is increasing labor cost in China and moving it to other countries, where Indonesia now, they're talking about increasing labor costs. So you have to be able to deliver a better product, much better value and much more fashionable.
And where does Perry Ellis distribution in the off-price channel fit into what you're doing with the brand going forward?
Well, we liquidated a lot of inventory last year. As we made the transition from -- to the new Perry Ellis. So we changed also the packaging today. If you see in the off-price channel a brown label, that's the old label. The blue label is the new label, and it looks much more different than what it's ever looked before, so we moved a lot of that inventory, but the off-price channel is a channel that we use for liquidation of inventory, and based upon that, we will -- our inventories, as of third quarter, were down 20% to LY, and we will continue to sustain better levels of inventory to LY. Our inventories are very, very, very clean, and we will continue to ensure that we manage our inventories so that we don't have to liquidate and go through the off-price channel.
And then on the golf business, you have a lot of things going on there. You've got PGA and JCPenney, you got Walmart, new growth, you mentioned Callaway and green grass. Help us when we -- as we try and evaluate your total golf business, say, over the next 2 years, where do you think the biggest upside opportunity is?
Well, I think golf in general as a total lifestyle -- I look at golf as a lifestyle. I see golf as a lifestyle growing. I think that more and more men are buying synthetic knitwear when they play golf versus a cotton knit, which is really what has transformed the consumer to replace their entire wardrobe, basically, and going into synthetic knitwear versus purchasing a cotton or going on and playing in cotton because they feel more comfortable. It absorbs their sweat. And as well as, the great thing about a synthetic knit, they can play a round of 18 holes and go to work in the next couple of hours, and they still look clean versus when they go out and play with a cotton shirt, they look like they just got out of bed. So that momentum will continue to grow. Our business in the PGA TOUR brand is very, very strong, with JCPenney, as well as Macy's, as well as Bon-Ton and all of our department store business that we currently do today. Kohl's continues to be a strong growth vehicle for us in Grand Slam, and we're excited about the introduction of Ben Hogan at Walmart, where we just delivered 2,000 doors. We set up a shop in all of their doors. We have merchandise coordinators going out to 2,000 doors. We think that, that's a great opportunity for us, not only as -- to have a brand in Walmart, but also to be able to expand the brand into Licensing opportunities. We have people that are interested in hats because Ben Hogan wore a lot of hats when he played. We have licensees who are interested in hosiery, in shoes. So it bring in the entire lifestyle. And management is, at the end of the day, they're all golfers at the top level. So they're all excited to have a brand like Ben Hogan affiliated with the Walmart stores. When I look -- when you look at the other pieces of the business like Callaway, that business, we just recently announced the -- an addition of the Callaway license by taking on Latin America and as well as Mexico. We're in Liverpool already, Palacio de Hierro, which is the best department stores in Mexico and as well as taking over the green grass business, which has been great for us. And long term, it's a great opportunity, because now, since we control all of apparel for Callaway in the United States and the Americas, we are able to consolidate the offering of inventory. Because in the past, we only had the corporate side and the retail side. We didn't have green grass and we didn't have the big box, which is a sporting goods channel. Now that we have everything, we'll be able to manage our inventories and not have so many SKUs, which is what we're going into this year. So we're excited. There could be additional opportunities with Callaway in other markets as they look to us as their strategic partner. And they have brought on -- they're spending a lot of money on marketing, which is great for the brand, on national television, as well as golf. The golf channel -- and Phil Mickelson did pretty decent last week. So all in all, we're very happy with the golf business. And the Women's business has been growing very, very, very aggressively. And we have many retail partners that are very excited about the introduction of ladies' golf and, as I mentioned, some of our other initiatives in the golf side. So golf in total, we see it as a strong double-digit growth vehicle for us.
And can you go back in time and you bought -- you acquired Rafaella, and can you sort of tell us the story of you acquired it, there were some expectations there, some expectations were missed. Now you've got someone new running it. Can you just remind us the story and how we should think about the ramp-up from here?
I'll bring you back in history to today. We acquired the brand 2 years ago from Cerberus. When we acquired the brand, we had a team in place that was running the business. And we looked at a business that was very profitable and we started delivering product, and we did our due diligence with the retailers, and they were all very happy and they commented that the retail -- the team that was running the business was very strong. And we had a great spring season. Move forward into the fall season, all of a sudden, it was a very, very warm winter. Didn't know that a woman has much more options than men. Men basically wear pants every day of their life, and 40% of Rafaella's business is pants. So when the winter basically came and it was very, very warm, we weren't selling any pants because women were continuing to wear dresses, and I'm not in the dress business with the Rafaella brand. As well as they missed many of the trends that were out there, like skinny legs and capris pants, et cetera. So there was a lot of misses. And what happened was is the president resigned, and then the designer resigned and we started seeing, as they received their stay bonuses, many of them started to exit and we had to bring on a new team, which we have put in place since July of last year. And I moved over the lady that -- Veronica Davis, who has been very successful in rebuilding Laundry to be what it is today, and C&C. And I put her over the Rafaella business and she turned around the product side. We brought in a new president, a new sales force, a new planning team. They never had planning. We installed a new ERP system that they never had an ERP system. Everything was done in Excel. So it was a big surprise for us, let's put it that way. And we feel very confident, based on the early reads that we have received from retailers such as Belk and Bon-Ton, Boscov's, Lord & Taylor, currently today on how we're doing. And we feel very bullish about the future of Rafaella and the platform that it gives us as we launch Laundry sportswear. In the contemporary side, it's a good complement to have a modern brand in the ladies' space as well, so that one will complement the other when it comes to sourcing a product. So that's basically what transpired. We basically really did a retransformation like we did at Perry Ellis with Rafaella, new labeling, new packaging, new marketing. Everything is basically -- we started from scratch. And we feel very confident and optimistic about the future of these 2 brands as we look to the future. We will also increase our replenishment side of the business, where it was maybe 10% of the total business. We're growing it to be 30%. Customers are very happy. Markdowns of replenishment inventory don't exist because you keep that inventory rolling for 12 months unless it's a seasonal item. So long term, we're very excited about the opportunity. I think that we have course-corrected Rafaella, and both Rafaella and Perry, which represent 33% of the company's revenues and profits, are doing much, much better currently today as we look to the future.
And oh, sorry, we have a question.
My apologies, I'm new to the story, so perhaps an elementary question. Could you -- in many of the categories that you described, whether it's Women's clothing or even the Men's clothing, for that matter, I'm sort of not asking a question on golf, which I understand very little about, although I know it's important to your business.
I'm not a golfer either. I just make a lot of product for them, that's it. I just love golfers, that's it.
Understood. All right. So just on the non-golf businesses, I guess, if you can help me understand, it seems like a lot of these categories are pretty crowded, not just the ones that you're in but the ones you intend to enter in, and I'm just trying to understand how do you differentiate yourself on the merchandising front and perhaps the pricing front. And if there's any other area of differentiation that we should understand about your business model, I'd like to know.
Well, Perry Ellis is not a new brand to the market. Perry Ellis today is a top 5 designer brand in department stores such as Macy's, Dillard's, Bon-Ton, as I mentioned, and some of the other department stores out there today. So we have a very strong position and we have our own shops within these stores that we control. Perry Ellis is, in terms of growth would be -- come from Perry Ellis America, which would go into our existing shops. So we would be adding more fixtures and adding more square footage to the stores that can actually absorb additional -- that they can give us additional fixtures and space for taking market share away from others that the retailers might decide to exit. That's how we plan to grow in those areas. Nike, in terms of -- in the menswear side is a growing business for us, both from a retail to teen dealer business to sporting goods business, where we are the licensee for all genders in the swimwear category for Nike. We've had that relationship for over 10 years. And growth really comes from specific to more elite product. Triathlon, that's really where the growth will come from, Nike Swim, and taking market share from one of the other 2 players that are in the market. Axist on our sportswear brand. We also do that with Kohl's, that's a proprietary brand, which has been very successful. We've been in Kohl's for the last 10 years with that brand and don't see any letup whatsoever at this present stage. So there are some businesses that are mature, and really growth comes from perfection of retail doors and making sure that you turn inventories better and grow your top doors by putting more inventories into them as much as you can based on the turn so that you don't lose sales. I hope I answered your question.
May I just [indiscernible] Could you help me understand -- I mean, a lot of the new retail entrants, the new brands, believe in going much more of a retail strategy and you were much more dependent upon the channel that historically you have dealt with, which is the department store channel. Is that a conscious decision? And do you see that evolving? And to the extent that it does change, what are the implications?
I feel comfortable. We've seen a lot of consolidation in the markets. I think right now, most of the retailers will stay as is. In terms of direct-to-consumer, we do currently operate 50 Perry Ellis retail doors between outlet and regular price, and look at that as a growing opportunity for us to further open up more and more retail doors. The same thing goes for Original Penguin, as I mentioned in my presentation. We currently operate 16 stores. Opening up -- we have already signed 4 to 5 additional doors already for this year that are planned. And we continue to speak to landlords and look for mall developers to look for additional doors. So direct-to-consumer is definitely via e-com and as brick-and-mortar doors is definitely part of our strategy. And should be, at the end of the day, 20% of our total revenues as we continue to build the brands.
Oscar, the department stores reported their January, February comps, a lot of commentary about weakness in weather and things like that. I'm not giving away any secrets for your customers. Can you help us -- can you just sort of give us your point of view on what is or is not going on out there, either with the consumer or weather? Or from where you're standing, what do you think is going on with the consumer?
We track our business on a geographic basis also, which is important to know. Because when we see that you have a drop unplanned, you have to analyze your business and you have to have the systems in order to be able to say, "Well, how's your business in South Florida? How's your business in Texas? How's you're business in California?" Because those parts of the country are not really so far affected by so much weather. They could be a little bit cooler than the norm. But in general, they don't have the snow and rain that you've seen in the Midwest, in the Northeast, et cetera. So we have definitely seen a slowdown in retail in general due to weather in the Northeast and the mid-Atlantic. February is a month that is -- it's important, but many of the retailers knew that there was a calendar shift, have moved a lot more of their promotional activities and events to March because they came out of the season much, much more cleaner. We heard that in January, retail sales, at the end of the day, were pretty good when we heard the comps. So January was a strong month, better than December. And that has allowed them to start the season much more cleaner. As I mentioned in my Perry Ellis information, why AURs are actually up, that is one of the leading components, that most people came out of the fall season much more cleaner than last year. In terms of the geographics, I would say that the Northeast and the mid-Atlantic areas are the worst hit right now in terms of retail performance. Our business in the Southeast, in the Southwest have been performing at plan or above plan, depending on the location. I don't see tourism reduce at all -- at any level in the state of Florida. Business in Florida is very, very strong. And for many retailers, it's actually performing extremely well. The Texas border and Texas in general -- and Texas border in particular, which we've had a lot of issues with crime down in the Mexico border, is actually up. And we see that part of the country continuing to outperform. And West Coast is doing well in general. We do have a lot of concerns out there today with the additional tax that we're all paying, as well as fuel is up over LY. And we still have a big gray cloud over us what's going to happen with the budget going forward, and do we see a budget and an agreement that we all can agree upon. So there's a little still of a cautiousness, but inventories are being managed very, very carefully. Retailers are actually turning and requiring turns to be much more aggressive. So we're -- we have all basically changed our formula in how we operate today. You can't operate the same way you operated in 2009. Those days don't exist anymore. So in today's day and age, you have to change your formula and you have to operate in the new norm. And you have to -- I mean, I had lunch today with a retailer and they were telling me, "You know, if this is the new norm of the weather pattern, then we have to operate on this weather pattern." And there's no -- it is what it is until we see some normalization out there today. But remember, the last year in the month of February and March, it was much, much more warmer. And in the month of April and May, it was very unseasonably cold. We had I think a Northeastern in the month of April. It's much better to go into the second half of the year much warmer than to start off when it's warm. Because if you start off when it's warm and then you go into coldness, your markdown rates are going to be substantially high because you got to get ready for the fall season. So in my belief, it's much better to start off cold and then go into a very hot environment, and that's what Plimel Anix [ph] is basically saying currently today.
Can you walk us through your direct-to-consumer strategy? So maybe take us through e-commerce, full-line stores and outlet stores and how we should think about your company in those areas?
Well, it's -- today, we operate 5 e-com sites. We feel that golf and Laundry should be our next opportunity. And we see that as something that we're setting up currently today. And it's a big opportunity for us. We still feel that there's a tremendous amount of opportunity on e-com for us, and we just launched Rafaella for the first time, and it's an important area. We are developing now a photo studio in-house. Because unfortunately, in today's day and age, many -- it's best to supply the retailers with your images yourself rather than them taking the photo shoot and picking a model that doesn't look right in accordance to what the brand is all about. In terms of direct-to-consumer retail, we feel that Original Penguin has an opportunity to be about 100-and-plus doors domestically and internationally. We currently operate international doors in the U.K. and as well as in Ireland -- not Ireland, Scotland with Original Penguin. And we just opened up 2 new doors in that part of the world, and we feel that, that's an opportunity. And remember, when we talk about e-commerce it's basically all domestically. We do have Original Penguin on an international side in the U.K. that operates that site. So there is international opportunity. We're working with a lot of third parties on the international side to embark on an e-com for international. Perry Ellis, we currently -- when we acquired the operating company of Perry Ellis, we acquired 50 doors or more than that, and we have closed many of them, because when Perry Ellis was opening up retail doors, they were really not in -- there was no such thing as premium outlet malls in those days, it was really just outlet malls. So we have been converting and converting and converting and opening up more and more in the premium markets in the outlet doors. We want to open up regular price retail doors under Perry Ellis. We tested them last year. 1 of them has performed okay. The other one was -- didn't do well. It's probably because in the malls that we opened them in. But we feel that we need to open them with ladies', the full entire lifestyle of the brand. We do operate, as an FYI, 15-plus Perry Ellis doors on the international side between Central and South America, as well as in Mexico, and those doors perform extremely well. They are Men's and they carry -- they also do Ladies' product, which we work with our distributors and licensees to be able to develop that product. So there is an opportunity out there to open up regular-priced stores with Perry Ellis. And as we build Laundry by embarking on the sportswear side, it allows us an opportunity to -- we don't have any ladies' components today on the retail side. And Laundry, when -- back in the '90s and 2000 under Liz Claiborne had in excess of 75 to 150 doors between outlets and regular-priced stores. So we feel there's an opportunity for that to be part of the direct-to-consumer business.
We have time for 1 last question, if there is one. And there is one.
Just -- can you just -- if you could share your thoughts about the wholesale channel and the department stores and the retail? What's your philosophy and how do you view the economics and sort of the pros and cons of one versus the other? If you can share sort of more your thought process vis–à–vis -- after all if you're a branding -- you are a company with a lot of brands. And the latest iteration of what I see out there is Michael Kors, lululemon, the newer brands going more retail, not that they disregard wholesale, some entirely do, and that's kind of what I'm trying to understand, what is your philosophical bent of mind for your brands?
Our philosophy is some brands are good for retail doors, your own retail doors, and some brands, you just can't do it. So I think that our key brands, as I mentioned, originally, those brands that are up there today, Laundry, Perry Ellis, Original Penguin and probably a golf component, those 4 initiatives would be the best brands to embark on an expanded retail rollout. But you have to -- you can't open up a store without just elements of the brand. You have to be able to offer the entire lifestyle. If you read lululemon, they feel that they have maximized their women's business. So now they want to make menswear a bigger component. Where today it maybe represents 8%, they want to grow it to 20% because their ladies' business has matured. So for us, we have to make sure that we can deliver women's product and it offers -- we have had challenges in Original Penguin doing ladies' wear. Now we have a whole new group, the ladies' wear introduction has done better. We can grow our business in Original Penguin by just offering womenswear in our 16, 20 doors by 50% by just doing that because women consumers at the end of the day shop more than men -- than the actual men consumers. So it's a big initiative and we definitely see those 4 brands and those 4 initiatives as our focus for direct to retail.
Great. I want to thank Oscar for a great presentation.
Thank you, all. I wish I had umbrellas for everybody but unfortunately I don't. Thank you, all, for staying. Appreciate it.
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