Ermenegildo Zegna N.V. Ordinary Shares

Hello everyone and welcome to the MRL Gildo Zegna Group 4 Year 2021 Revenues Conference Call. My name is Victoria and I will be coordinating your call today. If you would like to ask a question during the presentation, you may do so by pressing star 1 on your telephone keypad. If you wish to withdraw your question, please press star 2. When preparing to ask your question, please ensure that your line is unmuted locally. I will now pass over to your host, Francesca Di Pasquantonio to begin. Please go ahead.

Thank you, Victoria, and welcome to everyone joining us today for our first conference call to discuss the financial results of Zania since we listed on the New York Stock Exchange in December. As you all know, we listed on the New York Stock Exchange on December 20th of last year. That monumental day was the culmination of more than a century of Zania history and the start of Zania's next. grace chapter today we're going to discuss our preliminary 2021 revenue we will be using presentation materials posted on our website earlier today you can find the materials along with the related press release under the investor page of the daniel group website Today, I'm joined by Senior Group Chairman and CEO, Jill Boszlenia, as well as our CFO, Gianluca Tagliabue, and Rodrigo Balzano, CEO of Tom Brown. Jill will begin today, walking you through our results at a high level and discussing the groups ongoing with Trusted Gen Guidance. Gianluca will then spend some time going into the numbers in new detail and at the end of today's call, everyone will be ready to answer your question. Before we begin, I also need to point out that we may make certain formal state statements in today's code. Our actual results may be materially different from those expressed or implied by these overlooking statements. All such statements are subject to a number of risks and uncertainties, including those discussed in our S&P findings. I refer you to the statewide statement, which is included in page 2 of today's presentation, and, of course, this call with the government will be governed by that language. Again, we thank you for joining us today. And with that, I will turn the call over to Jesus.

Thank you very much, Francesca. And once again, I want to ask what a pleasure it is to be speaking with you all on the NSFIRS Turning Call as a public company. When my grandfather started his wood mill in Triviero, Italy, 112 years ago, his goal was to produce the finest textile the more than ever seen, while also being a company that cares for all the surrounding environment that is equal to our communities. All these years later, we have grown into a global luxury group present around the world, but our business is in so many ways based upon his vision. 2021 was a beautiful year for Xenia. Not only we deceased our company in New York, a publicly traded company, but we also launched a major brand of our legacy brand, now Xenia. A major moment that demonstrates the world ambitions we have as a brand and a company. In the middle of this milestone, we also performed extremely well, and I think our success was the result of effectively executing with regard to three core pillars of our statistics. First, we were actually focused on our namesake brand tenure Ahead of our listing, we pursued a campaign for the second brand, which has allowed us to increase our focus on beating the brand's equity. And because of this constant focus, in 2021, the day I started the program, at 847 million units in, it's 33% growth from 2020, and making up 66% of the growth total revenue. Second point, since applying for the brand in 2018, we have concentrated on growing presence, in a way that stays true to who it is and its unique place in the luxury market. This business has been very rewarding to watch grow over the last couple of years. In 2021, Brown had a 265 million euro in sales, 47% growth from 2020, and making up 20% of the group revenue. Finally, we continue to grow over an extra-large platform. with one-of-a-kind platform of Italian markets and companies, producing the world's finest textiles, both for our product and for our luxury customer bloggers. In 2021, the textile platform gathered €102 million in sales, a 17% growth from 2020 and making up 8% of the growth total in sales. Please go to slide number five. where I want to put you through some highlights regarding our revenues figure for the year. And over the past year, we have seen a strong rebound in the majority of our markets as the COVID crisis eases. For study data, the year for 2021 was just short of 1.3 billion euros, up 27% from 2020. and are now once again approaching pre-pandemic levels, as our momentum has been gaining speed over the quarters. This increase is reflected for both Steyer from Brown, whose revenue grew 23% in 47 respective years of the year. The growth we saw was driven in large part by very strong performance in the USA and register. We already can see strongly outperforming previous years' performances and growing at a faster pace than also. I am very pleased to say the least, that we are ahead of the business plan that we shared in July at the time of the business combination with Investing Master and in light of the success that we had and based upon how we think 2022. We play, we will play. We are advancing our guidance upwards. On top of that, the national position for 2021 is expected to be slightly positive, thanks to health care generation ahead of plan. So, we have raised our chance of getting margin for 2021 to around 10% up from 9% estimated. which is given in July 2021. And for 2022, we expect sales to rock in the low teens, with further steps ahead in adjusting interest rates. Well, we will elaborate more on the guidance at our next conference call early in the spring. When we expect to reach our full-year 2021, all this will be confirmed. Now, it's time enough to go to slide number six. And before I need to call over to Gianluca to give you more details about our organization, I want to share a bit about our strategy and the role for our group. As always, our main focus will be to stay close to our customer. We are led by our customer. And to continue to evolve alongside them. We will continue to focus on the growing casualization of Hensworth, including expanding what we offer and growing our clients in terms of luxury leisure wear. The consolidation of our previous three brands, Ergo Energico Zegia, Zeta Zegia and Couture, under the Zegia brand name, and the signifier introduced with this rebranding, also means that we will be more focused on our recording process. And our features in Snickers, which have grown to be widely popular, are a perfect example of this. Our main convention offering, the service we provide with a valuable whole of our products, remains a competitive advantage factor. It is one of the main avenues we pursue to maintain a close connection to our long-term customer and try further to provide it in Houston. From Brown, of course, we continue to be a major driver of growth for us, with unique brands and expansion to both women and men's wear, a strong brand awareness, and to growing customer base. Since I have already shared, the Luxury Tax Laboratory platform is crucial as part of our strategy, offering one of Italian craftsmanship and high-quality fabrics in excellent design from Brown and a number of major global luxury players. In terms of geography, we are increasing our focus on high-performing markets, And as we speak later in this presentation, the U.S. and greater China have been two of our best-performing markets, and we will continue to invest in them moving forward. While our focus is on organic growth, we are concerned that we have developed a strong platform to be further leveraged should interesting opportunities arise both on the national and on the brand side. Finally, the underlying focus on sustainability, embedded by my grandfather in Christianity, continues to underpin everything we do. You will be hearing from us more on this topic. Again, thank you for joining us today, and I look forward to taking your questions later. Now, the panel goes to Gianluca. Thank you, Gildo. Good morning, good afternoon, everybody. Today, I will discuss our revenue breakdown by different angles, by segment, by product line, by geography, and by channel. And I will start calling your attention to page eight, where we have the breakdown by segment. We have two main segments. In 2021, the biggest segment, which includes in-brand, textile, digital alliances, rebounded by 23% from 2020. to exceed the €1 billion mark, representing 80% of the group's overall revenues. Dombrano saw even more significant growth, growing 47% from 2020 levels to €264 million, with a two-year stack of plus 64%. Moving to page 10, we see the performance by the product line. So the revenues for the Xenia branded products grew 33% from last year, with particular strengths coming from sales of luxury leisure wear and shoes. Tom Brown revenues have seen robust growth across the board by channel, geography, men's and women's. And Rodrigo might talk about this more in the Q&A session. Textile revenues grew 17% for the year, offset by a 9% decline in strategic alliances. That is our B2B business when we produce on behalf of other brands not belonging to the group. This came as a result of higher inventory levels in some B2B clients post-COVID. the business of strategic alliances in the first half of 2022 is expected back to normal. Moving to page 12, we see the breakdown by geography. As Jim has already shared, we have seen significant growth in U.S., where revenues were up 53% from 2020, pushed by a strong rebound in the Zania-branded products, especially in the Zania retail channels. Greater China region continues to be a particular hair strength for us, growing 28% compared to 2019, and 34% compared to 2020. EMEA exhibits a similar strength, with 20% growth year over year, especially driven by Italy, which has been exceeding pre-COVID levels, and a very strong retail performance in the Emirates, especially Dubai. Meanwhile, Japan and the other Asian countries continue to be negatively impacted by COVID-related restrictions. Moving to page 14, we provide this breakdown by channel. DTC direct consumer outperformed in 2021, growing 39% year-on-year and 6% compared to pre-COVID levels, and all sales drove growth was in the region of 14% versus 2020. This reflects our prioritization of retail and our strategic decision to be more selective about our wholesale editing. In 2021, BTC represented 66% of group sales compared to 60-61% in the two prior years. BTC for Zegna grew 35% year-on-year, with particular strength in EMEA, Americas, while the DPC for Tom Brown growth was more than double compared to 2019, performing over and above the growth of the retail footprint. We remember that Tom Brown had 28 stores in 2019 and now has 52 stores at the end of 2021, but the growth was higher than the expansion of the retail footprint. Wholesale sales also grew for both Zing and Tom Brown at 24% and 32% respectively from the 2020 levels. While Zing-branded products saw wholesale growth in Asia and North America, Tom Brown wholesale growth was driven by Europe and Asia-Pacific. Don Brown wholesale in the second half of this year, 2021, was impacted by a different timing of deliveries, which in 2020 shifted from Q2 to Q3 due to the COVID implications. For Q1 of 2022, we have scheduled strong shipment to wholesale accounts for Don Brown. Finally, page 16, let me reiterate the guidance that was anticipated by Jimbo for 2021 and 2022. As Jill anticipated, we are raising our EBIT guidance based on the 2021 strong performance, and we are ahead of the business plan that we shared during the workshop July and the analyst day of November 21. Our adjusted EBIT margin guidance for 2021 is now around 10% up from the 9% estimate of July of 2021. In terms of net financial independence at the end of this year, we see preliminary levels before the impact of the business combination that are positive, thanks to healthy generation of cash well ahead of the previously disclosed plan. As for 2022, we see low sales growth compared to 2021. And we also expect further improvement in the EBIT margin for 2022. Thank you, Dean, for joining. And with that, I'll hand it back to Francesca.

Thank you very much, Gianluca and Gildo. We are ready for your questions. Operator, you can please open the call to the Q&A. Thank you.

Thank you, Francesca. If you would like to ask a question, please press star followed by 1 on your telephone keypad. That is star followed by 1 on your telephone keypad. If you wish to withdraw your question, please press star followed by 2. When preparing to ask your question, please ensure that your line is unmuted locally. And our first question comes from from Bernstein. Please go ahead. Your line is open.

Thank you very much indeed. It's Luca Solka from Bernstein. I was wondering if you could give us a bit more detail on how sales are developing online and what is your distribution strategy as far as digital is concerned. If you are prioritizing multi-brand platforms or if you see that the brand.com distribution strategy Avenue is more open to you. How are you thinking about this? Then maybe looking forward, I understand today is just about top line, but I'm curious to get your perspective on what could potentially make you further upgrade your EBIT performance margin. We saw that some of your peers have experienced in the most recent period very significant improvements in operating profit, and I wonder where you stand on that and how you're looking forward to build profitability over time. Thank you.

Thank you, Luca. The first question will be answered by Francesco Pazzan, the CEO of Stonebound, and the second question will be answered by Gianluca Tagliabue, the CEO and CFO.

Thank you for your question. In terms of online strategies, we have focused on the specific Monobrand website, in this case, I'm talking about Monobrand.com, as well as certain key marketplaces. We have a very strong partnership with Simparfetch, where we run the majority of our sales. And we also launch Tmall products. In the second part of the year, with the soft launch, when I talk about soft launch, I talk about specifically launching with classics only and not doing the full investment or marketing until this year. We see growth mostly in the channels that are guided by us and stuff that we own on eBusiness. And we continue to see a reduction on any promotional sales on eBusiness. So an extremely international and extremely healthy and strong growth in all channels eBusiness.

Gianluca, would you like to continue on Zegna?

I add on Zegna, so we are seeing good traction in both direct channel e-commerce, Tmall, WeChat, Farfetch when we go direct. We are seeing, and we are now presenting the full collection, we are seeing e-pages. We're receiving the new collection because it's embedded with iconic products, which are easier to sell. through the multi-brand ETL platforms. So we are seeing the key retailers welcoming our offering more and more. The more we move into iconic product, so I think that our direction, both direct and through wholesale retailers, is positive. I will build on top of another... another driver. That is not probably commerce, but we are seeing a lot of revenues that are finalized in the stores but are activated by our we call it C2C outreach. So any customer advisor has a customer portfolio and they reach out to their customers through the different platforms, whether it's WeChat or whether it's WhatsApp, and they propose to their customers the new collection or total looks. And we see an important stake of revenues activated by this communication, which is digitally native, but then finalized through a physical ticket. We see this into an omnichannel holistic platform, which is not maybe recorded as e-commerce, but we are taking great advantage of this of this part so in going to your second question luca is how do we see our ebit margin improvement which are the buttons we need to push uh definitely the two areas are uh star productivity and uh full price cell phone those are the two areas that combined are the ones that move the needle the most. And we believe that with the one strategy and with the collection that is moving into more recognizable and iconic items, we can push both the store productivity as well as the sell-through and manage in a lighter way the burden of seasonal leftover because we will have more continuative parts of the collection. So all these things are the key levers on the Zegna EBIT margin improvement. I would like to ask Luca one point, which is this rebranding, I mean going from only one brand. It's putting us really in pure luxury. So we have increased the value of our product regardless of the price increase. And I think that we can really count on higher margin on that side. And so I think that these products mix on the upper side. we favor, you know, also the EBIT margin. And to be honest with you, we see this rebranding going full-scale starting in May. So far, you know, we have seen that we test the new product in the direction, we work a lot on the marketing side with the data label, but the full range of the data product new labeling we'll be starting with a free form. So I think we look forward to that. So far, you know, the trend has been on our favor.

Thank you very much indeed. Thank you, Gildo. Thank you all.

Thank you. Perfect. Thank you, Luca, so much for your question. I'll now pass back over to Francesca to present our written questions.

Yes, hi. I have two questions from the webcast. The first question is about the dividend. I can answer to that question. We don't have a dividend policy which is public and announced yet. We expect to formulate a dividend policy and announce it probably at the next board on the 7th of April. There is a second question on the business, and in particular on the U.S. consumer. What is your view on the resiliency of the U.S. consumer into fiscal year 2022? Would you expect the strong luxury consumer sentiment to continue? If so, could you elaborate on the underlying reasons for this?

Gildo, would you like to take this? One of the highlights of 2021 has been the United States. And we were looking forward to that. And I think that this time we continue. And I think our reference and our decision to open up, to do luxury, to go digitalware and to offer more iconic products, to continue to offer our special order pieces, not only in clothing, but also in luxury jewelry, is the right direction. I think that we are really... Change is some of the face of our store. We have just opened up Boston shop. We have planned to open a few other doors which are modeling, sun, just to make the store look more in that direction. The outreach that Gianluca said, I think it's a good part of this conversation. We are seeing a good reaction of the customer once you go to them with a new starting approach on the offer and then they come back in the store. And so that's on the RIT side. On the other side, we are turning some door, a goods store of our clients into concession. I mean, after the Bloomingdale, a couple of years ago, it's now the term of Nordstrom. And so we have worked in that direction. And we are going to have more conversation with other folks. And I think that as we control the distribution more directly just by having a consistent approach into our product, into our service across the board, I think that it goes surely in our driving. So, overall, I'm positive. And I think that this strategy of rebranding and of such residual is up for call. And I think that's the way the customer in America is going. And there is room for that. If I think the many powerful, tailored customers we have, that we try to convert into actual software without using, you know, our forwarding and filtering through main permission in particular, I'm glad. So I think it's just a matter to execute perfectly. and just making clear to them the perception that their brand has changed from a tailored brand into a luxury, easier brand, without taking away anything from the special officers. So this is my point of view on that.

Thank you, Sergeant. And we'll move now to the conference call questions, please.

Perfect. Thank you, Francesca. And our next question comes from John Guy from Jefferies. Please go ahead. Your line is open.

Yes, thank you very much for taking my questions. Good afternoon, Gilles, Jean-Luc, Francesca, and everyone on the call. Could I just start with a regional question, so maybe directed to Jean-Luc? If we look at the US and the UK, I think on a two-year stack, We had sales that were down around 14%, I think, in the US and a little bit more in the UK. How much do you think in fiscal 21, how much disruption do you think you've had on the rebranding? on changing the fascia of some of the stores. Obviously, the underlying growth is very strong, but I'm just trying to understand how much disruption you've had and wondering why, for example, in the US, you're not seeing maybe stronger growth on a two-year stack relative to the peer group. My second question is just around your textile revenue. I think you said that that grew 17%, so slightly slower than the group. Is that at all a reflection of slower order books anywhere. I know you mentioned that you had a strategic alliance sales decline of around 9%, so that's your B2B business. But just wondering why the textile revenues were a little bit lighter relative to the group. And my final question, if I may, just on guidance, I appreciate this is a revenue call, but if you're guiding to low-teens growth, Gianluca, is it fair to assume that we might see revenues in 2022 in excess of $1.4 billion. Thank you very much.

Okay. So I think the first one, UK and US. No, the rebranding has not created any disruption in 2021. The rebranding started... with the release of a capsule collection in november december we started doing changing the signage of the stores uh we covered the key stores by the end of the year but then we have a rollout through 2022 so the reality that if we look at on a two stack day two year stack basis i would not call it out as um related to the rebranding. I can make a specific point on U.S. On U.S., if you look at the breakdown by channel, of course you don't see it by channel in geography, but you will see wholesale damia decline in wholesale in two years. Behind that decline, there has been an explicit decision to be present in fewer better doors. That has been a strategic decision that we clarified during the roadshow. So we decided to be present in fewer doors of the big department stores where we couldn't represent properly the new direction of the brand. So we want to be present where there is a full organization, and that decision came along not in the last month, but we decided from 19 onwards to be going through the pruning of our U.S. wholesale distribution. So the reduction of U.S. needs to be read also in this angle. The reduction in U.K., it's simply related to profit. We have seen fewer customers, affluent customers from being London, the hub of several nationalities. We have seen this. customer not present as much as in 19 in London. And I would state the same command on Singapore. We have seen that kind of nationalities gathering in Dubai. So that is the reason of the decline of US and UK. On textile, I leave it to you, though, and then I come back to the last question. On textile, I think the answer is very simple. Sure. Textile, in particular, the feature managing the stage relies on tailoring. And, you know, tailoring was done big time, in particular the suit side. So we are getting back, but we get back in 22, in 21, we are partially back. On the other side, I must say that that 17% was really by the resilience. I think Dondi, if I may make a comparison, is a Tom Brown. What's a Brown is for women to wear? Dondi is for Texas because Dondi is Jersey. It's like me. It's like you wear a knitted jacket. And so their numbers were quite good. and quite probably so. That shows the resilience of having a textile as a platform lab made out of different parts. Also, the lastly acquired Ubertino, specialized in Jacquard, for top-notch luxury brands, shows good numbers, but unfortunately, you know, that came at the tail of 2021. And so this is the reason, I would say. But things are... are moving in that direction for next time. Next to Gianluca. Yeah. Well, I need to be extremely careful with specific numbers, but I try to do a mathematical exercise. You take the 1292 preliminary revenues, and if you apply a team growth, you are definitely north of 1.4 billion. Yes. So the answer is, are we budgeting to be north of 1.4? Yes. Simply applying a team growth to the 1.292 mark that we are presenting as preliminary.

That's the answer. Thank you very much. Yes, that's perfect. Thank you very much. Thank you, Jonathan. We are ready for the next question, Victoria.

Thank you, John. So our next question comes from Matthew Gerald from Deutsche Bank. Please go ahead.

Hi, thanks for taking my questions. It's Matt Garland from Deutsche Bank. I had three questions. Firstly, can you give any idea around some of the trends that you're seeing over and up to the kind of Chinese New Year period? and how you're positioning yourself, I guess, for the year ahead with the Beijing Olympics, etc. Second of all, in terms of, I guess, the margin accretion... Matt, sorry, can you repeat the question?

We haven't heard you very well. Could you repeat the question? Hi, Matt. Just a bit louder.

Thank you. No problem. So, sorry, in terms of my first question, so... Can you give any further details around the trends that you're seeing coming up to the Chinese New Year period and maybe over the Chinese New Year period and how you're positioning yourself, obviously looking to the year ahead with the Beijing Olympics and some other events? Secondly, in terms of the adjusted EBIT margin accretion in your guidance for 2022. How should we think about this in the context of your targets that you previously set? I believe that you're around 10.6% margin for 2022 previously. How should we think about that level of accretion in that context? And then if you're able to do so, sort of looking into the longer term, what do you kind of see as the margin potential on a medium-term basis? And then my final question would be, in terms of the omni-channel strategy for this year, do you have any sort of key milestones that we should be keeping in mind where you're sort of changing the customer proposition materially or anything of that nature that we should sort of keep in mind? Thank you.

Thank you, Max, for your question. I think we will give you an answer on both the Tom Brown and the Zeynep perspective on the trends in China. We can start with Rodrigo who can elaborate on Tom Brown.

Thank you for your question. We continue to remain confident in China for 2022, for sure. there could be some small disruption around cases of COVID in specific cities or malls, but we are navigating very, very well with our trends on a daily, weekly basis, so we remain confident for the year. Yeah, I would say that we have a similar reply. I would say we are positive. You know, there are a few cities that are a bit affected, and Without that into account, the trend remains positive. But we are watching the situation with attention, and I think we have all the ingredients there to still do a good job. But we are watching the situation week after week.

Does that answer, or did you want to have a little bit more on the medium term, on the... Yeah, if there's any, I guess, any further information you can give, that would be good.

So I can take instead the question about the margin. I merge the answer into your second and third question. I start from the third, which is the potential. I think we declared that we want during the Roadshow Investor Day, we always declare that our target is to get as soon as possible to 15% margin. That has been always our declared first target on EBIT margin. Next year, this will be one step in that journey. This year, we are landing at 10% instead of 9%. And we believe we will keep this accelerated journey towards the 15% mark. We declare that we are expecting to improve further, of course, towards the 15% goal. We put that or we don't disclose a specific number yet. We might reconsider during the April touch base. It will be more specific because, of course, the environment is volatile, but we are clearly committed to that goal in the near future. So that is the answer on the margin improvement. The last topic was the moment challenge. To put into perspective, we value growth and this is the ground based on how many customers we're serving and aiming to gain more customers while never losing that original customer. So everything we think, we don't necessarily think how many stores we need to open. We focus much more on customer engagement. And we're putting in gigantic effort on data, on software, and customer value management, and we continue to focus on growth on client. We, at the same time, have all the support from the shareholders to invest. And going back to China, we continue to be bullish in investing in China. But the most important is to post even above on the channel because everything is focused on the customer regardless if you're serving through stores, through online platforms, or through customer value management team that might not be fixed if they're sitting in the store. It could be an office serving customer clients on the back.

And that needs to apply to the brand as well. in terms of the approach to omni-channel and multiple touchpoints, increasingly more data-driven and very client-centric. The client is what matters, the channel is the byproduct.

Great. Thank you for answering my question.

Perfect. Thank you, Matthew. Our next question comes from Stefan Destrasse from Millennium. Please go ahead.

Hey, good morning. Thank you for taking my question. I have two. The first one is, can you elaborate a little bit on the performance of SoundBron in the second half? I think in the first half, Rooney were up more than 100%, but Rooney were up 4% in the second half. And what this plays a role into the guidance for 22, where in the low teens, If we assume some recovery at Wegener and some positive ethics, it feels like the brand will be trending at a much lower algorithm than what it has been in the last two years. Thank you.

Yes. So from a frontline point of view, we have extremely healthy the bulking proposal for the future. We just think there's different timing of how we make shipments of connections, as well as the plastic, which may be part of the choice. It will be released in this year. is not at all a worrying trend in North America. DTC, we saw, obviously, the comparison I just had was to a very deflated 2020 social close. So we saw this outstanding growth. We saw a great normalization and a very consistent trend not only in China, in North America. We are very good, in fact, to block the pressures on North America. We see a very strong trend in North America. And we are seeing a great improvement overall in the Western world for us in our stores. So we have no surprises in the business. We're not catching up with any budget in the stores. We remain healthy across the board, and so is the organization in certain stores.

Regarding how this translates into the 2022 growth, we are not disclosing at this stage the growth by brand. And so we cannot be more specific, unfortunately. Understood.

Thank you.

Perfect. Thank you, Stephane, for your question. And I'll now pass back over to Francesca for any further questions.

Yes. There are a couple of questions on the web. Regarding China, you have a strong footprint in China. How do you see the presence going forward in terms of streamlining your operation? Do you see China as your main geographical contributor, or will you spend more and more effort in adding other areas to the task?

I think China remains the face of this territory. And I do believe that if we stay as such and so, we devote a lot of attention to China, making sure that China works. Because they love innovation, they like surprises, they like services. They like to shop. Unfortunately, they cannot travel abroad, but they are traveling. I think that China is a metal factory. We see that every time we have a new product, every time we have a new store, every time we have a new project, we go to China and they're there. It would be sick not to keep devoting the appropriate amount of resources there. However, there is not only China. We can make an example of Dubai. Dubai is a city area. We had a similar problem. I think it goes beyond the expo. I think it will continue. It's becoming a hub that is very interesting for the international traveler. And I think that we have the right product mix and the right team there to go further. Karachi remains an interesting territory. And I said it before, America, I'm not putting America last. Let me just say, I want to say a few words. I think we see the traction, we see development, we see attraction. The wholesaler industries are down, they're coming back. We see some good replies on the powerful Winter 2022 collection. And so I think these are, I would say, the tricks of Trump's operation. More or less, you know, than you have. Surely, I can tell you that the proposition and the focusing of the collection... and in two directions, more accessible and larger than the world. It's proven to be the right way to go. And I think this is the moment in which the relationship between the landlord, the relationship with the wholesaler, the relationship with the retailer comes along. I think that we see that they come here to us and they want their support. I would say that one important aspect also is getting back to our local customers. We see that the travel does not resume, unfortunately, for the reason that we all know. We have to increase our focus on local customers across Europe. the world when america is for sure but in europe in particular so we are seeing uh some fraction there as well um not only of the loyalty customer but also with you customers and surely on the channel helps because maybe they don't buy as much as they as they find america or in china it's a way to talk to them to communicate to them I don't know. If you go to the official Instagram, you see the incredible transformation of the branding in the past few months with all the new ideas, social activities, and surely it attracts a lot of customers. So it will be positive on social and on the digital market, new digital market approach.

I don't know.

From Tom Brown's point of view, China remains a very exciting market with extremely sophisticated clients, both men and women, women and men. We have extremely elevated the luxurious positioning in the best properties in China. And to put it in perspective, we opened the first store only five years ago. It's a direct operation since then. It creates teams. We focus on China, and we have the market. So digitally savvy, the consumer engagement is fantastic. So we are very motivated by China. But as Chico said, it's only one of our markets, important one. And we have seen fantastic growth. trend in this in Korea. We have seen also great proof of concept of our first toy to buy open a few years ago. We're having a very strong momentum in Milan, with the first women's first-time store in Europe together with one in London. We are having a strong momentum both in the East and West Coast, as well as the stores that we open always during the pandemic in Canada. So it's just one part of the world, very strong business, and the beautiful things that we cannot not putting the perspective today every single market is localized so today in china we're serving chinese in korea mostly serving koreans and similarly most places in the world so in real terms we're serving to the local customer and that made us focus even more in the development of btc in the key market thank you operator over to you

Perfect. Thank you. At this point, we have no further questions, and I would like to pass back over to the management team for any final remarks.

Okay. So if there are no further questions, we thank everyone for attending this call, and we will be back on December 8th with our results and more details guidance for 2022. Have a good day, and thank you very much.

Thank you. Thank you. Thank you.

Thank you, everybody, for joining today's call. You may now disconnect your lines.