Geox S.p.A. (GEO) Earnings Call Transcript & Summary

[Foreign Language] Good morning, and good afternoon to people connected via streaming via our website. Thank you for joining us in this is really important day. Today, we are presenting the new business plan. But let's start immediately with the welcome speech of our President and Founder, Mr. Mario Moretti Polegato, the inventor of Geox. Please, Mr. Polegato.

First of all, good afternoon, ladies and gentlemen. On my way to Milan today, and as you know, we live in Treviso, I was wondering the following. What is the point of planning for the future while the world is still struggling with the pandemic? Looking back to what our whole team, led by our CEO, Livio Libralesso, have accomplished over this past period, the answer I came up with was definitely yes. And this answer stems from the fact that we have done a great job in modernizing Geox, not only for today's market, but for the market of the future. There is much to talk about what will be the market of the future. But the actual point is to understand and implement what needs to be done. We believe that we have done this, and we are here today to present it to you, all. Firstly, Livio and I decided we should start with human capital, which represents our future. But today's market requires new professional profiles, different and often more complex than those we have today and that have led us to where we are now. And then we ask ourselves what can we do to infuse passion in the managers, who have recently joined the company? And the answer is vocational training, explaining the Geox competitive edge, analyzing the brand's positioning on the market, understanding the needs of modern consumers and what they really want. And then understanding market perceptions and where the market is going. This is how we have been able to reorganize the frontline managers, namely a group of competent individuals, who firmly believe in Geox, capable of telling our story to the world. And then, with them, we have built a platform of key content for the new Geox. We set out by rationalizing retail. We closed unprofitable stores placed in less than prime locations in order to invest in the premium and most representative stores and open new ones. The pandemic has clearly highlighted what needs to be innovated in terms of technology and digital solutions. So we have been determined and assertive in creating a pool of extremely competent persons in the e-commerce division obtaining amazing results in all the countries in which we operate. This has compensated for sales loss following the closing of nonperforming stores. And most importantly, it has opened up new markets where a direct dialogue with consumers is possible. This has also been important in relaunching sales in existing stores by creating a digital platform, which provides clients with a more comprehensive service. Our marketing, which has always been an essential tool, has evolved. Many of you will recall this briefing shoe, the smoking shoe. We realized we needed to change our communication based on technology. Indeed, science and technology have their own jargon, which may sound as harsh. So we have created a new way to talk to consumers a new dialogue to communicate our technology using a more simple and engaging language, highlighting the benefits rather than explaining its functioning. This is the message we have sent out and will be communicating extensively in the near future both through traditional channels, such as the press and television as well through social media, the protagonists of the market evolution. We have also renewed and strengthened the relations with our multi-brand clients, with the aim of increasing the presence of the Geox brand in their distribution networks. We all know how important this outlets are for us. Another very important aspect, which I would like to bring to your attention is our rigorous cost control policy, especially in those areas no longer considered significant for the company. In conclusion, -- In light of what I've just said, we are cautiously optimistic and aware that we have worked out a clear strategy and put together a team that will reaffirm the point of excellence, which Geox has always stood for, a unique product, thanks to technology and the Channel style brand a useful and empathetic communication, a clear brand positioning in the medium segment of the footwear and apparel industries. And finally, a sustainable Geox world to confirm the brand and our product. I would like to thank [indiscernible] Paris, the son of Simon Paris, the founder of the foundation, and he was appointed President of Geox Ethical Committee.

Thank you, Mr. Polegato. So let's have a quick glance to the agenda. It is divided in 2 parts. The first one, there is the transformation journey, our investment in people and our commitment to sustainability and then the strategy -- marketing strategy and merchandising and product strategy, both footwear and ready-to-wear. A coffee break. In the second part, the execution by channel with strong skills vertical in each single channel, digital, retail, wholesale and our omnichannel approach to deliver strategy of growth and profitability by market. A few slides on the supply chain and finally, the financial. We will open the Q&A question, and we will be ready to take your question and also the question of people connected via streaming. At the end, a quick final wrap up. So as a matter of fact, this is a 5-year business plan. I have been engaged as the CEO of the company in January '20, today, December '21. So the first chapter of the business plan has been already delivered. I mean the focus on the core project. And today, we are here to speak about the second chapter, a chapter of growth, we call it, Bigger and Better. At the end, our aim is that Geox want to be the same company. Why the needs for a change? Because you remember very well January '20, full year '19, EUR 800 million turnover just breakeven at profitability results. So really a brutally simple question, why Geox was delivering support profitability results? I have been serving in the company since 2001 as CFO, and then as Corporate Managing Director. So I didn't need time to invest in the diagnostic. The situation was really clear in my view. This chart is important. It shows that in 2011, the company -- the group decided to move retail really in a strong way. We increased the number of DOS from 280, still 450 and then 480, more than a 60% increase in our retail footprint. At the same time, if I look to the green line, we lost our focus on wholesale with really the weight of wholesale decreasing sharply from 77% to 45%. The combination of lost focus on wholesale and higher retail drove to really a huge decrease in the profitability. The red line, EBITDA, you see that from 26%, a drop until 11 and then 4%. And in order to protect the profitability of the company, the company and the group decided to reduce the marketing spending. I did also really a survey on our peers in the industry. I have been working in this industry since 30 years today. So at the top luxury sectors, all the players are 80% on average retail, 20% wholesale with 70% of gross margin and 21% at EBITDA level. At the bottom, the fast fashion players. They are 100% retail because the pricing power is low, prices are low gross -- total margin is low. And consequently, there is not enough margin to have a 2-layer distribution model. I mean wholesale and retail. In any case, gross margin, 55% and EBITDA 15%. In the middle, the premium sector, we strongly believe that the Geox deserves to belong to this sector. However, on average, this sector has a 55% gross margin and 16% EBITDA. Going to Geox, you see 2019, 50% gross margin. So 500 basis points lower than the peers. This means a brand issue. In addition, our overexposure to brick-and-mortar retail drove to additional sales costs. And consequently, also Geox was delivering a lower operating leverage and consequently, additional 500 basis points of lower profitability. This explains the fact that our EBITDA margin was at 4%, 10 percentage point on sales lower than our peers. So the brutally simple diagnosis in 15 days, low gross margin, overexposure to brick-and-mortar retail, lost focus on wholesale and reduced marketing spending. It was important to clearly state these issues in order to deliver and to align all the company on the beautifully simple answer that are regaining gross margin, immediately optimize brick-and-mortar retail at least a 20% of the footprint, boost on omni -- on digital and omnichannel, regain qualified wholesale in core markets and increased marketing spending. This is the recipe that we are implementing -- we started implementing in 2020 in order to recover position in terms of profitability. It was clear that it was necessary to make a change, to get a really strong transformation journey started, to set the direction clearly, and then to onboard people in this project. Because without onboarding people, no -- it is impossible to have a successful change -- a successful transformation journey. So we fixed the building blocks of the future business plan. On 4 real big pillars. The first one, a strong cost result in order to free up resources because immediately on the other side, it was clear that we were obliged to invest. First of all, in the digital transformation of the business model, but especially in the revamping of the brand. And this means more marketing spending. The other pillar is a merchandising boost. What we defined merchandising boost is really to pay attention in the architecture of the collection in order to produce collection with a lower range of SKUs, but really focused on our target customers from one side and really that fit well with our distribution where the final customers meet Geox. And this approach, together with the brand revamping, should immediately drive and deliver a strong reduction in markdown. Transformation, digital transformation. For sure, retail will be different, wholesale will be different, and the omnichannel approach is the key. So we really invested a lot in the transformation of the business model. The purpose of these 4 pillars are to regain gross margin and to deliver operational leverage. But suddenly, March, the world has changed. And as a matter of fact, the outbreak of the pandemic for us has been a tremendous call for speed. To protect the people, to protect the company, and consequently, we have been obliged to really hardening the rationalization process. We did it in, let's say, 9, 12 months, the program of 24 months. Today, this is important. I can say the first part focused on the core, the rationalization, mission accomplished. We've been able to close, with no material impact, 20% of the network. We have rationalized the geographies, Canada, U.S., Japan, Germany and the U.K. And finally, in November, we have also been able to sell the premises in Serbia and to receive the proceeds. I'm underlining this because our net financial position should be a little bit better than what I disclosed in November because we have been able to sell the premises. Focus on the core, in any case, laid also real important foundation, not only the optimized cost, but also an important organization transformation and enhanced digital capabilities. And also, we are seeing the first signs of ignition in the brand momentum and the strength of the product portfolio. In fact, some of the first results achieved are a reduced breakeven point in 2021. New wholesale partner. We are expanding the perimeter more than 600 doors gained in 2021, thanks to Spherica project. In our network, we have been able to deliver really a material reduction in markdown, 800 basis points compared to 2020 and 400 basis points compared to 2019. But I'm really proud to say that the 2 projects that we managed according to the new way to do business, we defined with Boston Consulting, this as a trading lineup. It means to have all the part of the business really when you launch a project, so advertising, editorials, windows, other TV campaign product really well distributed. We have been able to create Spherica, 85% sell-through in 20 weeks, 100% full price; and Nintendo, really 2 big success of this new strategy. I was talking also about the organization. Focus on the core add 3 priorities. The first one, define a line organization set for growth and for profitability. We invested a lot in recruitment and in the leadership team. And also, we invested a lot in our people in order to onboard them in the transformation journey to have 120% of their commitment. Today, the group has really a strong headquarter, with global leadership capabilities to drive the company and also to be in touch with -- directly with countries. Channels are defining the business model, and then the omnichannel committee that we have, on a weekly basis in the quarter, try to analyze and to support each single country in order to request to the country to deliver top-line growth and an increased profitability at EBIT level. So today, we have a fewer organization layers. As a matter of fact, we canceled the regions, headquarter countries directly. And in my opinion, the global leading capabilities are fine. The team is ready. Most of them joined the company during these 2 years, except Monica, that is really one of our assets. Francesco Garello, the Chief People Officer. Peter Salvagni that joined the company 5, 7 years ago. And Julio that started the digital transformation in 2018. They are the presenters. They are part of the global leadership team. So I'm not investing additional time on this. I want to invite Francesco Garello. And let me express a special thanks to Francesco Garello. He's really a senior manager. He spent most of his career in international companies. He worked for Ferrari, Maserati, Fiat, Generali. Always delivering and driving cultural change and transformation to set the company for achieving important results. Under his tenure, in Ferrari, Ferrari has been named by Financial Time, the best place in Europe to work. We dream maybe not the best place to work in Europe, but for sure, our people are really important. Please, Francesco join me.

Thank you, Livio, for this amazing presentation. And thank you for your trust. I've been proud to be here today. Good afternoon, everybody. Let's talk about our Geox people. While connected at this moment in the world in streaming and which I greet you all. The organizational structure is made up of the 3 drivers of the business plan, which are customer-driven omnichannel strategy, development of footwear and [indiscernible] collections based on our customer personas. All organizational positions are filled by leaders win an important international background and from market-leading companies. We have built up a team that has announced the best existing skills in the company as well as bringing in new skilled people, as required by the business model. How can we get people onboard with the proper skills? First of all, we have set up our GIDA, our Geox International Digital Academy, aimed at developing digital skills, future skills, service design, thinking methodologists, to enable, to empower, all people to support the entire digital transformation underway. Just one figure, 500 people have done 50,000 hours of training in 2021. Let me say, that's amazing. Digital workplace, what does it mean? Basically, it's a technological platform that supports -- that connect -- will connect all people to business data, services, information, operating processes, training and so on. We consider our company like a community, and inclusive and comfortable open environment where people can give their best in an equal way. Passion, open mind, excellence are our attitude. Finally, let's talk about the change management. We are implementing a new way of working that represents the compass of the people strategy of Geox, which put more and more the person at the center, the person at the center of the digital ecosystem. Finally, I proudly -- let me proudly show you a new Geox people manifesto. Maybe it would be the first time in the business plan of the presentation we show the new Geox people manifesto. As you can see, the new manifesto identify -- is a footprint that identify Geox people all over the world, because people always and always are the most important asset for the company. Thank you for your attention.

Gracia, Francesco. Just to add that this is really a serious project. Every employees at Geox, as his training card, there are close to 200 training pills. Everyone has his proper path to upskill. And eventually, if he's interested, he can also join other training pills. And this project has been awarded, in 2020, as the best learning project in Italy by the Italian Association of HR Manager. And also the master in digital transformation that we are doing inside the company is in collaboration with Politecnico di Milano, Mylan Institute for Technology and Skill. You will see during all the presentations that we are trying to partner with the best-in-class in each single part of our business. Why we are so investing in people? Because people are part of our ESG approach. From a governance standpoint, since the beginning and as Mr. Polegato told and said before, we have a good -- an ethical committee that published a policy of conduct and also of sustainable development. In addition, we have a really strong commitment for transparencies with all the stakeholders of the company. Consequently, we are really trying to do our best in financial communication and also in nonfinancial communication. Moving to the environment. There are levers that are 100% under our responsibility. And we are trying to do our best. We are 100% green electricity in Italy. Completely 0 discharge in Italy, so completely circular. We are investing in solar panels. Moving to the -- closer to the product. We believe that it is a path. Together, we have opportunity to improve, but we strongly believe in the power of associations in order to move forward together with the industry. So we joined Fashion Pact. We have a collaboration with WWF to support their projects. Our packaging is sustainable according to Forest Stewardship Council standards. And also most of our leathers are bought from tanneries belonging to the leather working group. In addition, we are trying also to partner with the leader in sustainability as far as the product is concerned. ACVC, Aquafil. But later, I don't want to spoil the presentation of my colleague. I'm really proud to see that, in any case, technical analysts included Geox in the sustainability top 150 leaders according to 35 KPIs included in the nonfinancial communication. And also, people are starting to see that Geox is investing in sustainability. We have been included by La Republic and -- a German survey institute in the green start of sustainability 2021. So we closed the focus on the core. Let's start with the new chapter of growth. So let's start with Bigger and Better, that is really the core of this presentation. Just a look at the competitive arena. The global footwear market, including sport, is a really big EUR 338 billion in the world. Focusing and getting closer to our core markets, excluding technical sports. To our core business it worth EUR 74 billion in the 27 European country, plus U.K., plus Russia. We want to play in the price range, [ 79 150 ]. So this is a clear statement regarding the positioning of Geox. We don't want to change the position. For sure, our strategy is to add additional volumes in the premium segment, trying to increment a little bit the average prices of our products. You will see the strategy in order to achieve this. This is another important point. Finally, after years Statista considered that footwear market size will grow after the drop of the pandemic in the next 4 years at a CAGR of 4.6%. We have the ambition to more than double this growth rate because, first of all, for 2 reasons. The first one is that people are looking for brands that embed well-being human comfort, casual authenticity. And we strongly believe that these are values of Geox. But the second reason is that, in my opinion, our business plan is solid. There is a clear strategy, a clear execution plan. It is simple, simple based on digital growth. And so, I believe that we can deliver a CAGR in the region of low double-digit figures. And even more important, I think that the competitive position of Geox is really strong based on our assets that are, first, a unique patented technology that provides the product with the really better benefits, a strong brand awareness, an Italian DNA, and this is important in our industry, a wide and established footprint -- commercial footprint with more than 700 stores, monobrand and close to 10,000 doors in the total. And then people and our sustainability mindset. So let's start from the real focus, our role in the world. We believe that our purpose is to improve people wellbeing on the move. We believe that in comfort and in style we, you, can go one step further. But let's start the presentation with our Chief Marketing Officer, Roberto Lobetti Bodoni. Please, Roberto, go ahead.

Good afternoon, good morning from my part. I have the pleasure to share with you the brand and marketing strategy today. So the pandemic shows a crystal clear consumer trends emerging for the future. And this research from lender like many others, says that the consumer will be more intrigued by purpose-led brands, brands that we lease in a higher purpose. And the consumer will be more engaged by proposition that leverage on casualization, comfort, and will be very interesting in high-tech product ingredients. This is something that's really resonated with our DNA. And let me say, there are very few brands are well placed as Geox to meet those trends ahead. In a fast-changing world, in an uncertain scenario, we deep dive into consumer data to write the next chapter of growth for Geox. And we got our customer centricity project started. As you can see, we are used to represent it as a circle because the consumer is at the center of everything we do and also because it's a never-ending process we can learn and benefit from. We started, of course, from understanding who is our consumer and who is our potential consumer, our prospects. And if we compare the consumer profile of the footwear industry in the key markets to Geox, it's easily understandable that we have a strong, strong leadership on kit, and we still have room of improvement in the women's channel. Looking at the age groups, we are not focusing that much on the age group between 15 and 34 years old, where most of the volume are made by sporty brands, but we have a very high loyal customer in all other segments. Partnering with lender, we identified 12 key personas that represent our customer and our process. We've got plenty of data about them, social, demo, behaviors, but also emotional connection to the brand in order to understand the drivers and barriers to enter in our funnel and build a strong product and communication proposition to sustain growth. Then we focused on 4 key personas that represent our marketing target that represent also the highest potential for growth. Such as clear for who we are in the market for who we play in the industry is important to understand where to play in which segments. So we are on a deep segmentation of every kind of product in the market from a customer insight perspective, what does it mean? We answer every single questions about the drivers and the barriers to buy a certain pair of shoes in order to understand which kind of needs and beliefs are fulfilled. And thanks also to our future market data modeling tools, we were able to get a clear picture of the future of the market in terms of trends and size and even more we set the clear goal for Geox were to play and to grow. Of course, the current is given by comfort area, so this is our DNA and this is where Geox is clearly leader. But also out-leisure and working style are tremendous opportunity for growth. So entering into new segments and gaining new customer but also increase penetration to actual customer and gaining market share in the current segments are key enables for growth. This year we launch beautiful designer product Spherica with aim to enter in the out-leisure segment and gain this particular customer, it was a terrific success. The creative idea was as the president said to deliver a message to talk about the benefit how we make you feel with the product rather having our superior technology explained. But technology will be always be the reason to believe our product are better than others. [Presentation] This is how consumer knowledge brings good strategy and deliver good results. So as someone noticed in the room that we shut this commercial just behind the location, yes. And so, okay. After understand of who we are in the market and which market we want to play, we wanted to make sure to be the right brand, the most compelling brand to sustain growth of both customer and prospects. Our brand is very well known as you seen this chart. [indiscernible] is higher than 90% in every key countries and consideration is highers versus benchmark, but to achieve our full potential and keep on growing, we are supposed to keep on improving our consideration because up to now Geox is very well known for something different our unique technology but in the future we want to be known for something that people really care about that's why with Livio and all the leadership team, we set and agree with a new brand purpose that inspire people inside and outside the company. The purpose is we improve people's wellbeing on the move because we strongly believe that in comfort and in style people can go one step further and how do we serve this purpose. We designed beautiful innovation tool because we are Italian, we know our DNA, inventors with good taste. So, the rear output is products that deliver wellbeing that anyone can enjoy always with care for the environment because Geox stands for [indiscernible] and access for technology as Livio said before. And let me say that in the industry, we are the only one brand known for well designed and well-being products that make you look good and feel good and this is the reason why millions of people choose our brand everyday. We set a clear brand framework and a clear brand values. Our brand values are best in comfort, our [indiscernible] style, Italian innovation and superior value. And these values inspire every day our product of development to deliver these values to the final consumer with our products. Brand is a character and has a particular choice and inspire the communication and the [ ton ] of voice with which we want to engage our audience and this trace our spirit of elegance, authentic, inclusive, innovative, and smart. So, we have a clear DNA, a clear positioning and so now it's the time to increase our relevance and pursuing relevance in everything we do, we make sure to track and improve our customer experiences and setup a top class marketing strategy. We all know that now days are good customer experience is brand bitter, but a bad one is a brand threat that's why we mapped and set all the KPI we need to keep on improving like customer satisfaction and then PS. In terms of marketing and story telling we reshaped out content strategy with three pillars. One, brand in which we want to leverage on the higher value part of our brand and shover our values product and actions. So this year for the first time Geox air the brand campaign and the purpose was to elevate the meaning of breathe from product functionality to a personal empowerment that deliver well-beings on the move. [Presentation] And product, we have Spherica last spring and now we just finished to air Amphibiox our product -- was approved product proposition. And we increased our sales by 100%, both in Italy and France, where this commercial aired. Spherica was -- the claim was transforming the world you work in, and Amphibiox is the range goes over our ad. Let's see the video. [Presentation]

In order to drive conversion and be eyecatching to investors, prospects and customers, we do rerun a lot of actions like pop-up shops or collabs. The last collabs during the back-to-school ads in 12 countries, got a terrific success. The [indiscernible] was leveraging on a new property, Super Mario by Nintendo, and get new customers and generate traffic and conversion in our direct channels. Let's see, the last video. [Presentation]

85% of sell through in few weeks. In China, a younger brand and the younger consumer suggested us to play in a different way. And that's why we appointed Zhu Yilong as an APAC brand ambassador, and sharing values story telling and activities will leverage with its content production and even more on his reach more than 30 million fans on Weibo channels to maximize sales and conversion and build awareness in this promising country for us. So reshape our narrative strategy was the time to increase effectiveness in media reach amplification. Nowadays, [indiscernible] is a top spender in the domestic market in Italy. So we increased a lot of our media investments as the video showed, and we will keep on doing, as you can see. And of course, having a lot of data, consumer data, it allows us to be more and more efficient and relevant for the final consumer, giving the right message to the right customer in the right moment is bringing our return on investment a positive increase. And of course, we will keep on improving, gathering data from internal and external sources. Key source for internal data is CRM. With CRM, we have a high ambition, and the ambition is to be the community that's loved to move with Geox products and share our vision and our mission. Of course, key roles is inside generation, listing the customer is to increase satisfaction and customer value, of course. And we have a huge potential unlocking our geographical expansion that is on the plan for the next years. Few highlights on CRM. We have more than 5.4 million families that are probably members of Geox Benefit, the name of our loyalty product. Contact strategy is very effective and represented 10% of the direct digital sale and is a very valuable sale because a loyal customer is used to spend and ticket this almost 40% higher than on average. Also thanks to a very highly customized marketing and communication model. So customers inspire everything we do beyond strategy, brand, marketing activities. Since the end of 2020, the trading line at, mentioned by Livio, allowed us to have a customer product -- customer-inspired product calendar that starts from key events, what is happening in the reality in the world. The consumer moved the propensity to buy or to have a certain behaviors versus a brand or an action and to find that the most compelling brand expression to engage our customers. So about entering into the product area, I welcome Diego Porro here on stage. Thank you very much for the attention.

Thank you, Roberto. Good afternoon, everyone. So let's talk about product strategy. To talk about product strategy, I felt it was important first to go through the milestone that led Geox to where it is now. Everything started with a genius idea, a unique technology and a patented construction, and we had a huge success. Following to that, technology never stopped, actually kept developing in Geox. And another big success was presented in the market with Nebula. So shoe that could breathe not only through the sole but also to the upper. And then again, the Amphibiox group shoes that were completely waterproof. And this technology was then developed also for more formal shoes with leather soles and again, something really unique and very successful. Then Amphibiox came, their [indiscernible] came and there with the ventilation in motion, having always the customer well-being as a focus, another success. So a technology that allowed air circulation in the shoes, something really unique and very, very successful. Coming to nowadays, as Roberto said, the huge success of Spherica, where not only de breathable concept, but technology took us to the comfort -- actually the ultra comfort, something that you can see from the day you fit for the first time this shoes till the end of the day with immense satisfaction. And so these have been really the strategic pillars of Geox, a unique patented construction, a constant focus on well-being and comfort as a master. So really best making know-how. The second strategic pillar has been the technology. So something has to be innovative. Technology has to be a focus and innovation a must. Third, priceless experience. So to offer to our customer something with a superior value, something with an amazing report value for money. And finally, the distinctive creative thread. As Roberto and Livio said, we are an Italian brand, we are proud of it. We have got good taste in our blood, and we develop shoes that are really timeless. So going forward, we decided to grow the business and to create a very strong product development. We decided to focus on 4 pillars. The first one is the lasting comfort, with all the technology and innovation that is very well developed in Geox. The upper casual style, we will see why, the opportunity. The spirit of elegance that has to be part of an Italian brand and superior value. So this amazing report value for money. First, talking about positioning. As Livio mentioned, what we felt is that we had the possibility to develop products with a more premium perception and also with more contemporary look. So in this slide, you can see that our goal is to distance us apart from the active and more the player like Nike, like the Skechers, the Adidas, go back to the roots, the upper casual universe, where we started from and in a more premium universe and segment. In terms of customers, we felt it was very important to study with Roberto, which where our current customers and also the new customers that we could take to grow our business. So with all the studies and also looking at the mega trends, we realized that we had different customer personas that we should target, develop our shoes. And definitely, there is this huge trend that is the casualization process that, particularly after the pandemic, became very popular, the forever young spirit, the manager mom that are looking for shoes that are not sneakers to go to the office, but at the end of the day, as comfortable as sneakers or the contemporary women that is looking for, yes, sneaker, but less active with more an upper casual look with more a sense of elegance, a certain taste that you cannot get from the classical active sneakers. So to go more in details what we decided to identify as our 5 strategic pillars to grow the business was one, to push on the women's category. We've got a big opportunity there. Our percentage of sales is at the same level of men and women typically are more shopaholic than men. So we know that we have got a big opportunity to grow there. Second, is to push this segment of upper casual. So really going back to the roots; third, to keep the leadership on kids where really we are leaders, and we want to continue and to push to capitalize on this leadership; four, sustainability, very important to our brands, as Livio explained. We will see what we have done in terms of product development, and then technology will always be part of our strategy. And every single product of ours will have a technological touch. So to be a bit more clear to deep dive in the universal shoes, you can see that we can really divide the shoes in 2 groups, the sneakers and the non-sneakers. In terms of product offer, we are going to develop increasingly sneakers with more of an upper casual style and upper casual look. Of course, the outwear, the out-leisure will be there. They are big trends, so they will be part of our range, but we will be focusing more and more in the upper casual universe. Even more in the non-sneaker universe, we are aware that the formal is still a segment that is important, but it's decreasing. The leather sole are a bit more uncomfortable. And as I said, the casualization process is definitely there. So we are going to increase more the product offer in the upper casual universe, therefore, rubber sole, swade, soft materials, both for men's and particularly for ladies. Kids we have seen from the presentation before the huge success that we had with Super Mario, even before with the collaboration with Walt Disney and in general, [indiscernible] and the interesting collaboration has always been very successful for the Geox sneaker. And we will continue on that. It's definitely a big trend. So it's part of our DNA, it's part of our business model. So we will continue. And together with that, we will continue developing new technologies like the lights and like other technologies that you will see later on that makes our business of kids so important and so strong. The second part is also here the upper casual universe, so shoes that are not necessary sneakers, but there are more shoes with soft materials, beautiful leather, soft rubber soles to make the kids feeling very elegant and comfortable. In order to be very clear, very focused in terms of architecture of the collection, we decided to rationalize our offer and to be decreasing the number of SKUs by 15% versus 2019 to divide the structure in 3 very clear groups, the core, the more and the new. The core representing 40% of our offer will be our shoes or families that will become iconic. They will have longevity. They will help to create our identity and to make a statement. So let's think about the Nebula. Let's think about the [ Arantes ] and the Spherica now. Then we will have more. So the seasonal animations of our iconic shoes. They will be representing 35% of our total range. And they are very important because they are -- they shoes that are the one that helped to capitalize on our bestseller to refresh our iconic and to catch the new trends. And then the third group, the new, will be representing 25% of our structure. And they will be the shoes that will be more aspirational. They will be more press worthy. And they will be perfect to attract new distributions. So you will see how important it is for us when we develop a structure a range. We think about the final consumer, but also we think about the distribution where our shoes will be sold. So here, you can see that the core will be perfect for what we call in wholesale distribution that is good. So the normal account, the big shoe specialists and the department stores. The more for the wholesale distribution that we call better. So the key accounts, the qualified department stores and the shoe boutiques. And then the new for what we call the best in terms of distribution. So the high-end department stores, the apparel boutiques and the shoe trendsetter. So in a nutshell, very clearly, what we will be doing, definitely, we will not lose the market share that we have got in the mass and we will keep developing collection that will be more price and volume-driven. Having said that, we will be focusing increasingly in collections that will be developing the icons and the seasonal animations of our icons to target a more qualified distribution. And on top of that, we will be developing more contemporary shoes and families to gain a more premium distribution. So this is an opportunity that we will be catching. So we also talked about sustainability. It's so important for our brand in every different aspects and definitely in our products. So you will see, for winter, a lot of projects that are completely sustainable. Different families that are either like our icons, the seasonal animations of our icons, or completely new families. We have been developing the materials from fabric to leather with companies that are very keen on sustainability, and therefore, they gave us leathers and fabrics and raw materials that are completely sustainable. We have been partnering with AC/DC that is this Italian company developing completely sustainable sneakers, or with WWF and many other activities, as you have seen in Livio's presentation. From our part, every month next season, there will be a specific product with a sustainable concept. And what is incredible is that not only we feel proud of following this trend, but also our customers love it. As a matter of fact, our sustainable shoes are always bestseller. So we will continue on this project on this part, and we will increase more and more. So we talk about 5 strategic pillars. We said to push on ladies' shoes. We said very important to target the upper casual segment going back to the roots. We said, number three, to keep the leadership on kids, technology, sustainability, 5 points. But we have also got another element, that is leather goods. And for all intents and purposes, I feel very confident about this project. I think it's perfect for our brand. As a matter of fact, shoes and leather goods, they always go together. They are perfect for cross-selling. We are talking about the category that has got a non-season business that has got very high margins that has no sizes. And therefore, as a matter of fact, very profitable. And we are going to launch this season for winter '22 for the first time. The first pillar, the still a range that is called the [indiscernible] line, made with a beautiful naturally tumbled French leather. Very much consistent with the pillars that we underlined before. So it's going to be for -- with a very much spirit of elegance, timeless in the upper casual segment, very functional and something that will rest for a number of years and will become our first iconic collection. And now let's have a look at the glance of our amazing fall/winter '22 collection. [Presentation]

Thank you very much. Now I leave the stage to the beautiful apparel development. I leave it to you, Peter. Thank you.

Thank you very much, Diego. We all love our footwear collection. Diego and his team is doing a terrific job, but outerwear is a special place -- have a special place in my heart. So welcome, everybody, also from my side. Before to look into the future of our outerwear collection, we need to step back and look at the long history, let me say, a love story of this product and the Geox brand. Everything started in 1999. The first image is about 2001, where everything was about technology, styled, tested and proven. Then we move into a more stylish representation of our garments until now, with a contemporary take on style and innovation. The outerwear business has been not steady in the last few years due to different reasons, mainly in product choices. We did a total look. We did the kid collection, and then the retailer rationalization. So now we have a clear idea about what will be next. Next will be a focus on outerwear collection for men and women, where technology and style will blend perfectly together. But let's have a look at our 20 years of innovation. Everything starts with our main technology, the breathing tape. At the beginning was very simple execution, just a couple of inlets on the shoulder. And then we are already with a perforated laser-cut, same fabric, integrating of the shoulders. So a completely new take on our technology completely integrated and very best performing. But it's not all about the breathing tape, it's all about other technology that we have developed during the years. We already know Amphibiox and Amphibiox is a completely waterproof technology, [indiscernible] that protect all our customers for any kind of element as the beautiful spot as we've seen before as presented to us. Then we also explore some other kind of technology, like X LED. X LED was a very innovative jacket with integrated lead that you control from your smart watch or you can control from your smartphone for user mobility. You can be visible when you need it. You will be not be visible when you don't need it. So the jacket is very clean, but inside, you have a special light that you can use it when it's needed. Then I run this because sometimes to make a very good breathable jacket for winter, we need a more sophisticated kind of technology. So [indiscernible] is enhancing as our breathability into the winter jacket. Last but not least, AWC. AWC is our modern take on waterproof technology, is more simple to construct, is more innovative and is very flexible for our contemporary life in the city. But it's not all about innovation on technology. It's also about innovation of style. Here, we have a very quick glance at our new editorials, our winter '21 collections. So you can see how our collection that is developed on our customer personas can be styled and presented to a broader audience, for women and for men. So we are ready for a completely new future. And the future is all about product strategy. It's all about 4 clear pillars: distribution, merchandising, seasonality and sustainability. Distribution is all about focus on our core markets, Italy, Spain, France and Germany and especially Russia. Russia is very crucial for outerwear, where our turnover is very high and the positioning is very interesting and different from the rest of our Europe countries. So focus on 4 countries, plus Russia. Then merchandising. Merchandizing is all about efficiency of the collection. So we already started. It's not something that will be in the future, but it's already there. We started in 2019 to reduce the number of SKU in our collection, to make the collection more efficient and to make the collection more profitable. We will be completely ready from 2003 collection. Seasonality. If you are working on an outerwear collection, seasonality is crucial. Because not all -- not every part of the year is very successful for jackets. Jackets sometimes are okay, sometimes are not okay. So it's not about to deliver the right product at the right time, but it's also about to deliver the right technology at the right time. So starting with our Amphibiox technology that protect you from every kind of element, we move into our brand-new UV protection technology for spring, fall and maybe summer. Last but not least is sustainability. Sustainability is not an overnight achievement, it's a journey. And we start with a small step. We start from the product. We start from the materials. In our new fall-winter '22 collection, we will have the 23% of our jacket completely sustainable, means three main components: outerwear fabrics, lining and [indiscernible] will be completely sustainable. The 62% will be with one or more sustainable fabrics. So close to the completely sustainability. Starting from spring-summer '23, every jacket in the collection will be one or more sustainable components. Until the end of 2004, where we will reach the 19% of our offer completely sustainable in the 3 main components. It's just the first step. The second step will be the packaging challenge, starting from fall-winter '23, we start introducing sustainable boxes, poly bags and anglers. As I said, it's just the beginning because sustainability is a very love story. But we have started in the right way, and so we look positively into the future. Thank you for your attention and enjoy the coffee break. Thank you very much.[Break]

Let's keep the vision, I ask to our colleagues to maintain this faster and very straight to the point attitude. So let's start the second part with the digital transformation and omnichannel and omni customer. Giulio Salvucci. Maybe at the end, we spend 10 seconds per each 1 of them because I'm really proud of my team. All of them have worked for international companies with the really strong experience in delivering results.

Thank you. Thank you, Livio. Thank you Good afternoon, everybody. Thank you for attending this presentation. Today, I will share with you the digital strategy of Geox for the next 3 years. But before starting with the actual strategy, we asked ourselves what should be the role of digital for Geox as a company. And in order to answer this question, we decided to look at what was happening in the market, especially when it comes to consumer behavior. So we decided to make a partnership with BCG, Boston Consulting Group, that gave us a full view on the main trends in the market. And here, main outcomes are 2. The first one, you can see in the top right part of this chart is more than 30% of the sales in our industry will be generated online in 2023. The second one is 45% of the sale will still happen in store, but will be somehow affected by an online navigation. So example, years are omnichannel journeys, research online and purchase offline. So having understood that, it was quite clear to us that digital for Geox has 2 main roles. The first one is a key tool to transform our business model across all channels. The second one, digital is a channel itself. So it's probably the single biggest opportunity we have in front of us to make our revenues increase in the next 3 years. Let's deep dive into the business model transformation. When we realized that the business model transformation was across all channels, all companies area, we immediately realized that we needed a digital transformation committee that following Agile principles allow us to have the full level of visibility and prioritization across all initiatives across all channels inside the company. Then we identified 4 main pillars of our digital transformation. We call them unified commerce, which is about creating new digital windows, but also better connecting all of them together. The second one, new era, which is about a new wholesale era. So it's a full rethinking of our wholesale ecosystem and later, I'll show you an interesting example. Then we have digital backbone, which is everything related to our technological infrastructure, and lastly the customer centricity. So how can we interact and can we engage in a better way our clients relying on data. That's an interesting example. So we decided to make a partnership here with Accenture in order to run a discovery phase for our new wholesale era. And the main outcome from that research is expectation of the wholesale clients are increasing more and more, and we are becoming similar to the final consumer one, so the B2C expectation. So here, the idea is to leverage on the experience we did in the past years by creating a B2C infrastructure and creating a very similar one for our B2B network, in order to increase the service level on one end and reduce the cost to serve of each single account. Let's move now into the digital sales. So as we said, digital is a channel. It's an opportunity. So I go back for a second to the BCG research. Here, we have a further level of digital. So just to recap, we still have 45% of the sales omnichannel. It's the light gray bar here. On top of that chart, you can see a further level of digital. So BCG expect in 2023 to have 14% of the revenues in our industry generated by the direct online channels and 18% generated by online platforms like Amazon, Zalando and so on. So what's our recipe for -- to balance all of those 3 channels. Well, actually, we believe in a combination of these 3 digital channels. Omnichannel boost is crucial because it allows us to bring traffic from online to our stores. The direct business is absolutely fundamental, because; firstly, generate the omnichannel journeys; secondly, allow us to present the brand and the collection at its best; and thirdly, it's a powerful tool to make people subscribe to our database. Thirdly, the role of online platform is to reach a broader audience of clients. So online platform goes more than 50% of the total traffic of e-com. So it's definitely a powerful tool to extend our reach to new potential clients. Let's go deeper into all of them, starting with omnichannel boost. This is our path to a full omnichannel integration, which started in 2019. So it's not today with the in-source of our e-com business. Today, in 2021, we already integrated the main omnichannel services, and later Massimo will give you some interesting figures and detail on how they are performing. Next year 2022, we expect to roll out also a new service called SHIP FROM STORE, which is an e-comm order fulfilled by our physical network. And the target is for 2023 to reach this seamless integration, which is, for us, the full integration of both inventory management and order fulfillment across all channels. We also designed our omnichannel fulfillment model. And the interesting thing is we realize that it must go in 2 different directions. So we have, on the right part, the in-store evolution, which is about launching new digital services in store, but also making the existing one more convenient and easy to use for the clients. The second one is about warehouse and how we manage the inventory. So it's absolutely to put together all the inventories we have in a single place and making them available for all the channels. Let's go now into the direct web business. As we said, direct business, our GEOX.com website, it's absolutely crucial in order to activate omnichannel journey, make people subscribe to our website and present the collection and the brand. So here the keyword is definitely personalization. We want to personalize the content, the message and also the product recommendation for each and every of our clients. Of course, in order to do that, we must leverage data. We absolutely want to go deeper into geographies. The single biggest opportunity here is probably Russia. We plan to open the e-comm in Russia next year. On existing geographies like China, we are opening new channels in China, for example, we just released WeChat, and we are about to open TikTok, new interesting channels. But also in existing territories like in Europe, we see a lot of potential from localization, localization of service and localization of language, of course. And lastly, the loyalty program integration. So make the subscription and the interaction with our loyal client more seamless. It's absolutely a goal for us. Lastly, we have the online platform. So as we said, online platform are incredibly powerful to reach new clients because a lot of traffic goes there. Of course, we want to control that kind of distribution. So here the keyword is quality. It's quality over quantity in the number of accounts. So we want to focus on a small number of accounts and creating very solid partnership with them. We want to have a centralized management, because nowadays all of those big players are international. So we want to oversee their activities from a very central standpoint. The in-season management is a new way of working. So it's no more selling only focus, but it's focusing on the sellout phase. And lastly, new business model. So here, speaking, especially of marketplace or e-concession, which is basically the possibility of having a direct business in a multi-brand platform. So we can control everything regarding pricing, regarding commercial strategy but leveraging the traffic of those platforms. And before finishing some early signs that probably our digital strategy is already in the right direction. So I'm very glad to share with you some awards that we received this year we have KPMG that awarded us for the second year in a row as the Best Customer Experience Excellence in top 15. So it's across all industry. We have Le Stelle dell'E-commerce from Corriere della Sera and Statista that awarded us in top 15 website in our industry. And Retail-X that made the list of top 500 websites in Europe, and we ranked in top 150. So I thank you very much for your attention today, and I invite on the stage Massimo, our Global Retail Director.

Good afternoon, everyone, and thank you for joining this call. I am super excited because today, I'm going to share with you the new chapter for our retail. You've heard a lot about retail, the rationalization. A lot of good things we have done in the past years. But in the coming 3 years, there will be a further transformation of our retail. We're going to have fewer, but definitely much better-looking stores than the one we have today. We will keep investing and strongly digitalize our retail in order to deliver an even better and more elevated customer experience, to achieve a higher profitability. This is all what we want for our retail. Our retail strategy is based on 4 major pillars, very simple, a clear network segmentation, a real customer centricity and advanced omnichannel mindset, and last but not least a revolutionary approach to a team empowerment. Under these pillars, there are different work streams. Several projects, most of these projects already started enrolling that will deliver a sustainable profitable growth for our network in the coming years. The first pillar, the network segmentation. Our operating model has different focus, a clusterization that will define a specific role and wait for each one of the cluster inside this theorical pyramid where the different weight has accomplished a different role for each store. Then there will be an optimization of the network with a clear focus on the 4 core markets where Italy is our domestic market, the most important one. Then ultimately, we will align all the different activities based on the cluster, based on the different shopping behavior of our customer inside these clusters. We create 4 different clusters, and they respond to a different role. The first 2 clusters are brand-led stores where the flagship are the most important one, but a very small one, they represent a small percentage of our total footprint. These beautiful stores are in top location in global key cities where we deliver the highest customer experience where we glorify our brand. Then we have the brand-enhancing. Brand-enhancing are essentially location in high streets, where we, in high streets, in big cities, deliver higher visibility for the brand and it's where we build aspirationally for our fantastic brand. Then the vast majority of the stores belonging to the last 2 clusters, the business-led stores, where the brand supporting are essentially shopping mall location, different shopping habits compared to the high street location. Here in big cities, we deliver higher footfall, higher profitability. These stores have been built with a very commercial format. Here, we really talk about our cash cow for the company. Then the last cluster, not the less important, the brand neutral are very important essentially for us because these are mainly franchising and offer the possibility to our brand to go more capillary on the different market. These stores have built with a very cost-effective concept to maximize the return on the investments made by our partners. The last 2 years have been very intense in terms of rationalization. The incoming 3 years, we are going to keep investing and renewing the stores only the profitable stores. We expect that by the end of 2024, 80% of our DOS network will be completely renewed with our latest concept, [DOS] stores. The rationalization will continue, but with a fine-tuning, we will keep closing down some more stores, the one that are at the end of their life cycle, the stores that are nonperforming or the stores that are not strategically relevant for us across all the different clusters in order to achieve in every single market, the perfect mix between all the different clusters. Then we will align all the activities and the offer inside our stores, inside our clusters. We know that there are different shopping behavior based on the localization of every store. We know that the customer experience, the visual merchandising, the store concept needs to be different. One strategy doesn't fit all. As we know that the product merchandising mix needs to be done accordingly to the localization of our stores. Stores in high streets have a much higher mix of women product, while the stores in shopping mall has a higher mix of kids products. We will merchandise them accordingly to that. You've also heard about the ongoing rationalization of the SKU. What we're going to do is increase the efficiency of the collection that we inject in our stores in order to reduce leftover and be more efficient with what we have inside of the store while leveraging the omnichannel services like the showrooming project. We will be able to offer a more vast option of colors without having the physical stock present inside of the stores and become more performance. Our second pillar, the customer centricity, the customer really comes first is really at the center of all our activities but we need to know more about our customers. We are investing in more projects, in more digital tools that will make their life easier at the end of this journey. But to know more about the customers, we need to collect data, and to speed up with this process, we had inside of our -- all of our stores, new digital tools, digital tools that will help us and improve data quality and quantity, these data are crucial and will support our contact strategy, a contact strategy that will drive quality traffic to the stores and sales. We also just released the unique digital customer idea. It's a good step in the right direction. We are merging online and off-line customers' data. We are now delivering a seamless experience between online and off-line. We simplified the process for the consumer, and we improved the advantage for our customers. Traffic, traffic is crucial in retail, especially nowadays. We know that Google My Business is a traffic driver is an important tool. We've been investing and updating all the point of interest globally. All our stores now are completely updated with all the relevant information that any consumers may need when you start browsing on Internet, simple things telephone number, opening hours, latest collection, latest campaign, how to get there to the store. Now everything will be constantly updated and maintained to make the life of the customer easier when they're looking for our Geox shops. But becoming consumer-centric without listening to the customer is little bit useless. Voice of Customer is a big project for us. It's a big game changer. We are partnering with Medallia, as Livio said, another best-in-class company. They've been partnering with the biggest companies globally in this journey. This program will replace the good old mystery shopper of the '80s. We will start from now to monitoring the customer experience satisfaction after purchasing for all our loyal customers and the anonymous customers in the future also. We will start answering and listening the customers review and give them feedback in real time will really turn signals from the customers from the field into action, action that will help us drive future sales growth into our business. Our third pillar, omnichannel. You've heard how important it is in Giulio's speech. We are enhancing the current O2O concept, online to off-line concept, optimizing the current set of omnichannel services, like the Click & Collect, the Click & Reserve or the actual return in stores. These services have been launched successfully are doing good, and they will do even better in the future. But the most important one is our endless aisle, the one we call Geox@Home, who is already representing more than 6% of our total revenues. This is not bad, and we expect them to grow until 10% in the coming months. Beginning of 2022, we'll release the last one to complete the set of all the omnichannel services, the Ship from Stores to really make a seamless experience between the 2 channels. We have also gone paperless. What does it mean? We added more devices in store. We eliminate paper. We increased dramatically with that. The data accuracy in-store, all this data that we saved are crucial in our journey. We also made a right step in the good direction to become a more sustainable retailer, while easier the experience for our employees in-store in collecting actively these data. On the fourth pillar, Team empowerment, you've heard this morning about how important are our people. They are the last mile in delivering the experience. We have been investing a lot in the past years, and we will keep doing it. Customer experience is really at the focus of our core activities. A small result but we are very proud of that, Geox has been awarded for the second year in a row by Ipsos and Largo Consumer as the Italian best footwear brand by our consumer for the best customer experience. This is not bad as a start, but we will keep investing in new projects in new digital tools that will enable our teams on the field to keep monitoring all the activities, all the store operation and all the things regarding the retail excellence because we want to be the #1 in delivering the excellence in the execution. And last but probably the most exciting project is our digital business community step. Step x is now live since a few weeks, let's say, since last November. We have been patterning with Logotel, a global company, also expert in digital community. We build this app together as a platform, it's really a super powerful tool. It's not a social media. It's not something just to engage and make likes with our employees. It's a really powerful business tool that is now accessible to every single employee, not just the store but every single employee. Even from their own devices, they will be now able to learn, perform and stay connected with us, and as a company with each one of them. It's a 2-way communication tool. It's a good platform to learn and to be ready for the future. It's a new engaging way for us to do retail. It's our way forward to do retail. Thank you, everyone, and let me introduce our Head of Wholesale. Monica Guidolin. Thank you, everyone.

Thank you to all of you for being here, and good evening to everybody. So we start our journey in the wholesale. First of all, we start with the mission. So wholesale aims to really reach a large part of customers by developing partnerships, able to generate value for clients and for Geox. So digital will be central for wholesale transformation journey and the synergies of these 4 pillars will be really supporting our strategy. The new B2B ecosystem, the realization of the concession, the distribution segmentation and the digital door and territory management. Let's go through these 4 pillars. The new B2B ecosystem. We will develop a B2B ecosystem B2C-Like since the e-commerce experience is driving the expectation of our clients and our buyers, and we will activate the 4 main platform. First of all, the 360 customer view to have a unique customer journey across all touch points, online and off-line. The second one will be the empowerment of the customer service. They will have a more effective customers' interactions, and then sales campaign, full speed to the rollout of the digital selling tools for our agents to have a faster sustainable sales process. And the most important, the B2B replenishment to drive and proactive, engage all our customers in this B2B system. The second one, the retailization of our concession business model to elevate our brand positioning. The holistic view of our key strategic partners will enable us really to optimize the profitability and the performances through the guidelines on the assortment through a centralized inventory, the in-season management and the omnichannel commercial calendar. The third pillar is distribution segmentation. Thanks to the digital tools that we have available, we set up the distribution mapping assessment to roll out our segmentation strategy. We have 3 main drivers, the clients' priority. We define rules of engagement based on profitability, strategic fit and growth potential. We define and establish very strict guidelines and boundaries for the assortment of our distribution versus the omnichannel and consolidated sales campaign customization. We mapped and personalized the client's journey into the 3 clusters of the segmentation, good, better and best. And then digital door and territory management. This is a fantastic tool where all our sales force across the world is daily interacting with global and local organization to provide data. We also provide data and analytics to our sales force for clients' portfolio in order that they really can care of the customer, and they can work on the performances of our customers. Said that all these 4 pillars will leverage our wholesale distribution strategy which is regain volumes. We want to regain volumes into a qualitative and premium distribution. Let's see really the strategic building blocks. So distribution and market share. As far as the distribution, we have a clear focus on the key partners on the independents and on the distributors. For market share, very, very high focus on women, high double-digit growth across the categories, reinforce our leadership in kids and scale market position in core markets and for the apparel, build a solid growth also in this important category. But what is wholesale? Wholesale distribution is a very solid network and very wide network of 8,600 doors across 80 markets across the world. In these clusters, the key accounts and distributors, concessions and independence. It's very important to have a channel variety because we allow us to leverage the market opportunities at the maximum of the potential. And this will drive our ambition to 2024 with a CAGR on 2021 of plus 40%. So let's have an overview on the distribution segment, the focus that we were talking before. First of all, the key partners. We want to be Bigger and Better. We have blessed 20 clients to -- that in 2024 expected revenues that will represent the 30% of our revenues. And we will focus to drive the consumer assortment to foster other categories in the distribution to follow the in-season management with a focused team in our HQ and in the field, and to implement the shop-in-shop concept in all the key cities. Another important channel is the independent. The independent channel is and will remain a very important asset for our company. It's a very important asset because it has a very high profitability and because we aim to reduce the cost to serve on the 40% of our customers by 2024, thanks to the new B2B ecosystem. I want to focus your attention on the Spherica impact. During our spring-summer '22 sales campaign, we gained additional distribution, thanks to this amazing project more than 600 doors, and we reached over 85% of penetration of the current distribution with a 30% like positive like-for-like. So we can see how this channel is so sensitive to the market, 360 marketing activation and TV campaign that we have run. Another important key element for this successful sales campaign has been, of course, the outstanding sellout of spring-summer '21 season across all channels. We move now to the global international distributors. We are talking about exclusive partners in markets where Geox has no direct operation. We are speaking about 30 markets. They are ambassador of our brands. They are our strategic partners in the business. And in this channel, we will be very focused on high potential markets to expand the distribution, the coverage on key cities. And of course, we want to ensure the global consistency. And to do that, we will invite all our top clients and all our distributors in our new international showroom. We will share with them our values, and we will share with them our transformation journey in the brand, in the innovation, in the omnichannel and in the marketing strategy. So let's move now to see -- to have an approach on the geographies because we have a different approach by market in terms of priorities and targets. The overview by market. North America privatized digital; Europe established top leading position on the core markets; eastern Europe, accelerate our growth; and APAC and rest of the world expand the footprint. But let's go one by one. North America, prioritize digital with our key partner to accelerate services and, of course, the performances. As far as footwear, we will expand the perimeter on the adult and grow the kids like-for-like as well as ready-to-wear to explore key accounts 360 partnership. This will bring us to have a weight in the total wholesale brick-and-mortar of 4% in 2024 and the CAGR of 15%. We move now to Europe. We said established a top leading position in the core markets, leveraging qualitative distribution with our key partners, of course, the segmentation would be really a strategic pillar as well as upgrade the independent efficiency. Women, high double-digit growth to gain market share across all categories. So not only sneakers but also all the other categories in upper casual. Kids, foster this magic momentum and scale the position in the market as well as ready-to-wear, maximize the perimeter and enhance our visibility in the key partners where we are present in this moment. The weight in 2024 will be 64% and the CAGR plus 12%. Eastern Europe accelerate the growth. In Russia, we aim to become leading in footwear market and become a best premium ready-to-wear brand. The acceleration will be done through big chain and big account and as well in Eastern Europe, we will invest in strategic partners. We will exploit the really amazing distribution that we have in independent distribution. We see a possibility to penetrate also the athleisure market segment and to exploit adult and also, in this case, the women categories. The weight in 2024 will arrive to 15% and the CAGR is plus 10%. And APAC region and rest of the world, Expand the footprint. A great priority on Greater China with an expected CAGR at '19-2024 of plus 28%. Here, we will develop a strategy on regional distributors, and we will expand our presence in Tier 2 cities as well as the global distribution in all Asia Pacific and the Middle East and Latin America, we supported the growth acceleration in the key markets. So the weight in 2024 will be 17% and the CAGR '21-2024 will be plus 27%. Let's move now to a successful story of our Russian market. In this market, we have already implemented most of the actions and it enables that we have shared in the previous charts. And the acceleration growth of this market has been given by establishing a relevance across, first of all, the distribution. Our own retail, the franchising network, wholesale, off-line and online. And as Giulio said, the coming on own e-commerce. There is then a very strict segmentation versus the distribution in order not to cannibalize the different channels. Geox Kids is really a really great successful channel with the kids stores and shop-in-shops. And for the ready-to-wear, an excellent execution in all the channels has allowed really to have an important growth in this category. So the brand relevance is very important and allow our customers to meet our product through all the touch points and to fulfill their needs. So very important, the premium segment as well as a very high focus and on the contemporary women and granting really the best shopping experience in all our own retail. And, of course, the customer centricity, which is granted and supported by a unique new CRM program. All these actions were able to grant a solid growth until 2019 and then to have, let's say, a slower down during the COVID period but always growing to bring our ambition to 2024 at more than EUR 60 million with a CAGR of plus 7%. So with this successful story, I would like to thank you so much. And I leave the stage to Alessandro Zamuner. Thank you.

Thank you, Monica, and good afternoon, everyone. So after being focused on the strategy of Geox about brand, product and by distribution channel, I would like to take your attention now and explain how we want to transform this strategy into an effective execution plan by market and according to our omnichannel approach. Before going to the plan, I wanted to highlight 2 key points. The first one is about our business concentration of our Geox business in the geographies. So you can see here, 2 main areas. One is Europe where we run the business directly. And one is Middle East and international distributors, where we have a business based on the third-party model. You can see that altogether, these 2 areas represent the 84% of the weight of our business. The area together is called MEA and international. So if we go to Europe, Italy is the largest market with 28% of the weight of business. But if you consider France, Germany and Spain together, the weight is the 30%. So it is clear that these 4 markets are the basis of our current business and must be the focus on our business plan. The rest of Europe is 20%, which is anyway a good percentage and also very interesting in terms of the profitability. Going down, you see that Middle East and International has a much lower weight of business with 6%, split by 2% in Middle East and Africa and 4% with the rest of our international distributors. So this is the first point that I wanted to highlight. The second point is about our market share versus the competitors. And this is a very interesting chart because it's based on the results of an external research on the 4 core markets in Europe, showing the market share of Geox versus the competitors in the segment of Brown Shoes and Athleisure business. You can see very clearly that Geox is in all markets in the top ranking value share position, where in Italy, in particular, we are #1 even considering in this segment, the sports brands. In France and Spain, we are in -- within the top 10 in a very solid position. Well, in Germany, we are a little bit behind the top 10 but within the top 15. Then if we focus just on the segment of kids, in all these markets, I would say, in all Europe, Geox is always on the top 3 positions. So what is the takeout that Geox is the only one brand out of a sports one with such a stronger market value position in all these markets and such a strong business relevance. So the major takeout of this quick overview, is that in Europe, for sure, we have a strong leadership in terms of weight of business and in terms of market value. And we have a huge potential in Middle East, Africa and International, because, to be honest, we are behind the benchmark of international brand. So after stating this, let's go to the plan and explain where we want to grow. We have identified 4 main growth areas and which targets we want to achieve in each of them. The areas are Italy, West Europe, Eastern Europe and Middle East, Africa and international markets. In Italy, we are still #1 but we need to be solid #1 by strengthening our current leading position in all genders. In West Europe, we want to grow and gain market share going clearly to the top 5 ranking position, in particularly the core markets, so France, Spain and Germany. In East Europe, we want to support the growth. Why? Because as I told you before, it's an area where we have a very strong brand relevance but also high profitability. So this is a focus in our plan. And last but not least, Middle East, Africa and International. Here, we are not satisfied to grow gradually in an organic way. We have an ambition to double the weight of the business in that area by investing with the key international distributors. So what is important also to know is that each of this area on top of the targets are supported by a clear and detailed execution plan. So Italy, Germany and Spain, they have all a strong local leadership and dedicated team focused on managing and executing the plans according to our strategy and in full coordination with our HQ leadership team. In all these areas, there are specific targets of market share and top-ranking position but also common goals in terms of accelerating the growth, accelerating the profitability and very important to optimize and upgrade the distribution with an omnichannel approach. On top of that, there is a strong attention on each plan to have a correct balance between our, let's say, physical business and online business, especially in Germany. So after explaining where we want to grow and which are the targets, I want to focus your intention on how we want to grow. And in this sense, we have identified 4 growth pillars to had a perfect execution of our omnichannel strategy by market. The pillars are optimizing our retail network, developing international business partnerships, redefine our wholesale model by increasing our profitability, accelerating the web and growth in the women's business gaining market value. So let's go one by one quickly, just to explain a little bit what I mean. So about optimizing our direct retail network, we have identified 6 work areas in our plan, 3 focus on perimeter and 3 on the performance. Regarding the perimeter, we are going to finalize our rationalization of the unperforming and not representative network. But on top of that, we want to accelerate the renovation of all our selected network in order to -- let's say -- with our newest concept in order to maintain a consistency of our brand visibility to guarantee the same customer experience. Then we want to start reinvesting on the key cities with a high potential where our presence is not at the level. About the performance, we continue to support the performance by our digital omnichannel tools, which are performing very well, gaining and giving a lot of growth. We are focused on a strong merchandising strategy in the women category, very important for our high potential growth. And we want also to increase our sales penetration in ready-to-wear and the accessories categories. The pillar #2 is about the partnerships. So we want really to reinforce our partnerships in terms of franchising, both in core markets and international. In core markets, in particular, we are already engaging master franchisees to complete our territory distribution with mono brand stores. While in the international part, as I told you before, we are already working with the best-in-class distributors based on sustainable growth plans in long-term view. The pillar number three is about wholesale. Wholesale for us is a big, big business machine, as Monica anticipated before. Here, we have identified 4 core areas. One is the developing of a strong segmentation of our distribution based on a proper assortment strategy by segments and by channel. Then we are going to focus on the top 20 key accounts in Europe to create not only business opportunity, but integrated strategies of the brand. Then we are implementing a strong retailization programs with key retailer based on our shop-in-shop concept, corner concept to increase our visibility and our sell-through. And finally, again, on wholesale, a strong focus on retail with a solid growth of our distribution and our penetration in like-for-like. The fourth pillar very, very important is about the web acceleration. But this acceleration of the business must be in consistency with our price integrity across the channel. So how to do that? We have identified 3 areas in our plan. One is the expansion of our direct platform, so GEOX.com, in all the European markets, also including the high potential markets that at the moment and not covered yet. The second area is about the centralization of relationships with a key platform and the integration of strategies between us and the key platforms in the market. And the third area, as also Giulio anticipated before, is the boost of our marketplace meaning that we are going to open digital stores, a kind of e-concession model in order to have our proper visibility, our proper control of a business based on a price integrity. Last but not least, of course, is women. We want to grow in women's business. We have a clear target. We want to gain market according to the size of demand, which is over 60%, 65% of the total adult business in footwear. We want to grow as a brand, not just as a product. So not only footwear, not only a specific category but also in the total projects. So footwear, ready-to-wear and accessories. And finally, we want to achieve a relevance in the women's business as a brand in terms of respect with our partners and market share. I finish my presentation just to highlight that this execution plan is really driven by a clear global strategy but also supported by solid enablers coming from the HQ, which are the main ones, of course, marketing. With Roberto and his team, we are working to reinvest 6% of turnover in each of the core markets, which is a really acceleration about the communication strategy. with Diego, Peter and all the teams, we are working to optimize and maximize the synergy between the merchandising strategy of our brand and the core local demands. Again, with the product team, we are working to focus on the product, in particular, in women and ready-to-wear, where we have a high potential to grow. And also, as already explained, with Giulio and the team, we are working to deliver more and more efficient digital tools to increase the performance. So thank you very much for your attention, and then I leave the stage to Livio.

We are a little bit late 10 minutes, I will be short in supply chain. So this is our distribution footprint, 6 distribution centers. Italy, U.S., Russia, China, Hong Kong and Canada. They have a specific, there is a specialization by area. Italy is the most important. It delivers goods in Italy, in Europe, in EMEA but also -- it full -- this distribution center fulfill 28 countries for our e-commerce and then is able also to deliver the goods for our new channel that is marketplace really soon. This setup does not require additional investment in order to fulfill the volumes of the business plan. However, we are investing and we are enhancing our supply chain because consumer expectations are really growing faster in terms of level of service because digital requires a new supply chain model based on speed and agility and because the omnichannel approach requires really a centralization of the inventory and the bigger control, higher control on the level of rotation. So today, we have been able to put together all the direct-to-consumer inventories, and we have a centralized warehouse that is able to fulfill store replenishment, e-commerce orders and marketplaces. However, Boston Consulting has been really clearly tough on this advising Geox that supply chains in the near future is really what should be a focus of the CEOs in our industry, because -- so global supply chains and operation are impacted by unusual discontinuities. First of all, unreliability. We were not used to suffer from lack of capacity to shipping crunch through shortage of shipping containers. And consequently, it's important to invest. They are advising the CEOs of our industry to put attention also on supply chain. The other challenge is the raw material prices fluctuation, especially the oil prices that is also pushing for increase in sea freight tariffs and increase on high freight costs. We're also experiencing a little bit of delays in the lead time of transportation, due also, especially in North America port congestions. It's really important to assess the supply chain and the global operation. Companies devoted a lot of efforts in the last mile, invested in the last mile. Now it's time to invest in the first mile. So we -- there are many tactics, actions that we can implement in order to mitigate the impact and we are doing. I'm really satisfied with our sourcing people, production people, production planning people and logistic people. However, it's time to bring supply chain at the next level. And so we did an extensive survey on the leaders in our industry, and we have been able to recruit a new leader that has just joined the company. And consequently, he will be in charge to set up the new model for Geox in the global supply chain. Really experienced, he managed the global operation of a real and important luxury brand in Italy, bigger, more bigger than -- very big compared to Geox with luxury, Maison and also 3 lines of products that are really premium and with big, big volumes. So finally, the numbers. These numbers are based on the assumption that the pandemic will decrease gradually during the first half of next year and will be back -- let's say, the world will be back to a new normal in the second half. And then also touristic flows will recover -- should recover in 2023. EUR 800 million is the total turnover projected in 2024. It may seem ambitious, and also CAGR of 11% may seem ambitious. However, our budget this year was EUR 660 million. Why we didn't hit the budget and we just delivered more than EUR 600 million? Because more than 20% on average closure of our network is working a lot in terms of sales. And also in the fourth quarter, as we disclosed in November, EUR 40 million of turnover has been lost due to the shortage of product due to Vietnam problem. So starting from an adjusted starting point, it is clear that the CAGR is mid- to high single digit, and EUR 800 million seems more feasible and achievable or -- it's important gross margin. Have been more aggressive on gross margin, but considering the current situation, considering the volatility and considering the problems in the supply chain, I believe it is feasible that the company is able to deliver more than 100 basis point per year in the next 3 years as improvement in the gross margin in order to reach the 50.5% That is just 100 basis points more than in 2019. So unfortunately, we will not be in line with the premium peers yet. But if our project will start working and people, the customer will recognize our improvement, maybe we will be able to sell more product full price, and consequently, there is a potential for an increase also in the gross margin. EBIT 5% to 6% on sales and EBITDA margin before IFRS 16, 8% to 9% on sales. Net financial position, I would say, net debt, our guidance was EUR 100 million. Today, it's a little bit better given the sale of the Serbian plant. So we are in the region of EUR 93 million. We have really a positive fair value of the derivatives. It was EUR 13 million in September. Today, it is even more given the trend of U.S. dollars. So there is the risk that we will present really a better net financial position according to financial accounting principles. However, net debt should be in the region of EUR 90 million to EUR 95 million, so better than our expectation. Net sales, EUR 800 million, so more or less the same level of 2019, but really with a different mix. We are growing online. We are growing digital. So from 17% in 2019 to 29% in 2024. Still below the guidance of the big advisers like Bain & Cuneo, Boston Consulting and so on. They assume really even higher growth. And consequently, they put that estimation in the region 32%, 33%. We will see. There is, let's say, room for a sort of contingency. Eventually, we may also be a little bit better than EUR 800 million, a little bit more. So 71% and 29% digital, with wholesale brick-and-mortar more or less in line with 2019. So we are not so aggressive on brick-and-mortar. For sure, we are more aggressive in our growth on those online 27% on 2019. As you can see, just a small increase of 6%. So really below market trends in wholesale web why, because as Giulio said, you are really paying attention to price integrity, stronger partnership. We will cut unpleasant, let's say, player, especially on Amazon and on other big marketplaces that do not follow our guidelines regarding prices. We are not interested in doing business with this kind of players, small players. We are interesting in big alliances with big players, Zalando, Amazon and so on, marketplace and so on. By product, Ready-to-wear will grow a little bit more than shoes, 12%. Leather goods accessories may be an upside for footwear because usually, accessories are in -- leather good accessories are included in footwear. By channel, wholesale more or less the same story. So an increase in the percentage of online, so 35% in 2024 and 65% on brick and mortar. Franchising is forecasted at EUR 65 million, far below 2019. This is due to the rationalization that we implemented. In any case, you see that the CAGR from 2021 to 2024 is higher than the average because franchising is going to benefit from some new openings. New openings in a different way, we call out of deal. It is really a wholesale-like franchising, especially in the Eastern Europe and in Russia, where we believe that our partners know the market better than us. And so we leave free opportunity to buy Skechers like, I would say. And consequently, they have no right of returns and no guaranteed margin. This percentage was -- the percentage in this wholesale-like model was 31 in 2019 is growing to 47 in 2024, and this means a reduction in the level of risk for Geox. DOS, there is an important shift EUR 70 million of growth in the online sales, EUR 75 million of decrease in the brick-and-mortar, EUR 80 million due to the perimeter and EUR 5 million due to -- positive due to the performance. So we have really an important digital strategy. A quick glance to the store network. More or less, you see 783 stores in 2021 today. At the end of the business plan, 761, more or less the same number, but the dynamics inside the subchannels are really different. We are also -- we are going to additional optimize network in Italy and Europe, 70 stores -- with the shutdown of 70 stores. And we are growing in franchising in Eastern Europe and in the rest of the world under distribution agreements. By region, we are not going to change the footprint. 70% was Italy and Europe in 2019, 70% is Italy and Europe in 2024. It means that all the regions are assumed to grow more or less at the same path, maybe some differences regarding the starting point and the size. Gross margin. So today, the forecast 2021 is we confirm the 300 basis points of improvement. We believe to be able to deliver more than 100 per year basis point of improvement, and consequently, to reach the 50.5%. I'm really aggressive on the cost evolution on the OpEx ratio on sales. Why? Because we have already achieved this kind of results. So for sure, in 2024, our OpEx may be 40.7% on sales. So really, we are delivering an increase in the EBITDA, 100 basis point for the gross margin, 600 basis point for the efficiency and the cost management and the rationalization that will finance at least 200 basis point of increase in marketing spending. So that has seen 8%, 9% before EBITDA, before IFRS 16. It's important to underline. And EBIT in the region of 5% to 6%. We invested a lot according to our best of suite strategy. So we identify in the market the partners and then we invest with them. Salesforce, Adrien, Oracle, ChannelAdvisor and so on, we will keep investing. The plan is EUR 70 million to EUR 80 million in 3 years, 35% on IT in order to announce additionally our digital platforms. We have seen digital B2B a new way to reduce the cost to serve of wholesale using digital tools. Then we will invest in the network. At the end, 80% of our stores will have the new concept of big store and the remaining 30% on all the other investments. As a matter of fact, this is not a capital-intensive industry. So we will keep a strict control on working capital. Our ambition is to stay in the bracket of 21% to 33% on sales. And consequently, all in all, funds from operation should be in the region of EUR 150 million, paying EUR 70 million to EUR 80 million of CapEx, means EUR 70 million, EUR 80 million of free cash flow. And consequently, the net debt at the end of the plan should be in the region of -- decrease in the region and, let's say, get the EUR 20 million to EUR 30 million net debt versus bank. We are -- I'm done. We are ready to open the Q&A session. I'm going to invite the team on the stage in order to answer eventually to qualitative question, we will take first the question from the audience here in the studios and then also from people connected via streaming. For sure -- waiting for the chairs in the stage, for sure. What about new lockdown? We hope that our strategy is to be more and more digital, can mitigate -- may mitigate eventually the impact. The other positive, I would say, thing is that our business is concentrated in the most vaccinated countries. So we really hope that eventually, new lockdown will have a lower impact on our industry. Supply chain flexibility, near-shoring, investment in the end-to-end process to mitigate the risk means advanced planning, advanced costing. It's necessary to be very prudent in moving the footprint because some kinds of shoes can be only produced in forest. If you move the production in any case, the company will experience problems in having the raw material, like the automotive, it is clear. So it's really important to monitor day by day all what is happening. And then what about inflation costs? We will manage prices. For sure, the increase will not be higher than 10%. In our opinion, our customer is not ready to -- let's say, to receive big increase for the same product. We did a test spring-summer '22, the average increase has been in the region of 4% to 5%. A good result, the order campaign in wholesale is up 25%. So this gives us confidence for winter '22 -- please, please come. For winter/22 -- guys, please, for winter '22, we are going to increase prices 8%. So this is an important way to manage input cost pressures, and we will also try to reduce markdown in order to be able to deliver the more than 100 basis points that we have disclosed today. So the team, I have just presented Francesco Garello, Roberto Lobetti, Forbes' America included Roberto in the 50 more promising, I would say, marketing director worldwide. Diego Porro extensive experience in our industry, Burberry, Head of Hugo Boss division of shoes and leather goods and Zegna and Philippe Model and I stop. Diego. Peter -- sorry. Peter Salvagni spent his career first in Nike and then he's been one of the players in the revamping of Woolrich starting from Italy and then Europe and then worldwide. So really strong experience in outerwear. Giulio Salvucci, one of the early, let's say, protagonist of Yoox story. So plenty of brand, plenty of sites onboarded in Yoox. And then he moved to company, in our industry. And in 2018, he joined Geox. Massimo Manenti, Foot Locker, Desigual. The Head of [ Apollo ], Ralph Lauren in Europe in EMEA and so really strong skills in retail. Monica Guidolin, she has a really an extensive knowledge of Europe of all the key accounts in Europe. She has been responsible for wholesale development of many brands. So she's really -- I'm joking [indiscernible] regarding the distribution in Europe. And Alessandro Zamuner, Diesel, Coach, Safilo with many -- responsible of commercial policy of many brands and also of the success of Dior in Safilo. So for sure, a team that has delivered the result that speak English better than me, but for sure, that will work better than me for the division they're responsible for. And the last but not least, [ Stefano Orsi ] from Armani. He's not here on the stage because he just joined the company. Let's start with the Q&A session.

Oriana Cardani, Intesa Sanpaolo. The first question is regarding the leather goods collection. So I was wondering if you can elaborate more regarding the pricing position. And also, what is your expectation regarding the -- this business, new line of this business and the evolution for the 3-year business plan?

Regarding numbers, they are not included. It is a potential upside because we just started. The project is really confident. So please, Diego.

Okay. Sorry, I didn't -- I understood the first question in terms of our positioning. And the advantage is that what we want to do is to be consistent with the Geox price positioning. But as you know, leather goods typically is around 70% more expensive than shoes, so we will be staying below the EUR 200. So from -- let's say, starting from EUR 99 to around EUR 200, an average price point of EUR 150. It's an amazing report value for money, also consider the competition because if we look at players like [ Forla ] that have got now an international brand awareness. We are talking about a business size of around EUR 500 million. Their prices are EUR 400, EUR 350. And then the same for Michael Kors. If you look at the lower ones that we can still consider brands like the Italian [ Janicarine ], et cetera, they are all above the EUR 200. So being below the EUR 200, it's a very aggressive price point but the value for money is absolutely outstanding. I didn't get the second question, sorry.

I replied.

All right.

The second question I've got is regarding the dividend policy. It seems in your business plan, 3-year business plan that it is not considered any dividend policy. So may we assume that you can come back to dividend distribution since 2024 onwards?

Yes. So let's say that today, the volatility and the uncertainty is quite important. So we are really prudent, and we are doing whatever it takes to maintain the financial stability of the company. However, once the pandemic will stabilize, the market will be back. I don't see -- let's say, we don't see any problem in distribution at least the most of the free cash flow.

Francesco Brilli from Intermonte. And just a quick one on financial targets on the -- if you can provide some additional color on the phasing from the next 2 to 3 years until 2024 of the targets on revenues and profitability. And if the CapEx plan is phased and even the split between years or upfront or back in Lloyd?

CapEx, let's assume EUR 25 million per year on average. And sorry, I didn't catch the first one. Just give me the start -- the first question.

The phasing...

Yes, the phasing, sure. So we are climbing EUR 700 million in 2022. And our target is to reach breakeven at an EBIT level. And then the path to EUR 800 million in 2023 and to be able to overcome EUR 800 million in 2024. And 2023, our target -- main target is to be able to hit the EUR 50 million EBITDA before IFRS.

Paola Carboni, Equita. I have 2 questions. The first one is on the women's segment. You seem to be very committed in this respect with ambitious target. I'm wondering if you can talk us about any action you are putting in place from the point of view of the product of the collection, if there is any new appointment in the design team, for example, or any style you want to push or you want to apply. So just to have a bit more of color on the product. And secondly, probably I've heard that you've talked about CapEx for a new store format. So I don't know if I'm wrong, but in any case, the question is if you have a new store format to roll out, what could be the time spend? And if you have any evidence already on how such a new store format is performing what advantages. What upside is it providing?

So thank you, Paola. You are right. I said new store concept. It is the [ ex ] store, but I still consider new because just a little bit more than 50% of the stores are -- have been renovated in this direction. So we have a strong commitment to reach 80% in the next 3 years. And for sure, once we are going to, let's say, renew the stores, we are seeing improvement in the like-for-like. And next May or June, we are going to open the new flagship in Victoria Manuel. And there, you will be able to see also some fine-tuning of the format in order to be more in line with the new role of our stores. Also, up for omnichannel services in order to attract traffic inside the store. Please, Diego.

Yes. With regards to the opportunity of ladies, in particular in shoes, we -- first of all, from an organizational standpoint, we have appointed a new head of design that is coming -- that's got an amazing experience from Chanel to TOD'S to Bali. And he is working -- we are working now on the development of spring-summer '23. We have seen the Prato1. It looks outstanding, and it's really phenomenal. That is from an organizational standpoint. From a product standpoint, what we are working on is not only the upgrading of the sneakers in terms of really taste, color combination, materials. That is going to be definitely more sophisticated and with a very right balance between comfort but really upgraded style. Also on, let's say, the heel shoes or low-heel shoes, we are working on a new technology. During my presentation, I talk about the manager memo, the contemporary woman looking for shoe that is still sexy, but also very comfortable. And there is a new technology that we will be launching in spring-summer '23, where we will be accomplishing really the super comfort with something that is really looking nice and it's going to be very unique. We are going to be, again, launching a newness as something that is unprecedented in terms of technology. So we are very confident in this area.

Still about that, do you envisage also maybe any collaboration with other brands or other famous designers or not?

No, no. For sure, we are thinking to collaboration. As you have seen, we are at the same table of Disney, of Nintendo, of the Pokemon company, of Marvel next year for the 60th anniversary of Spider-Man in Pisa where we are really trying to maintain and to enhance our leadership in the market. As far as adult is concerned, we have some projects on the table that today is a little bit early to disclose.

Marco Baccaglio from Kepler Cheuvreux. I would like -- if it's possible for you to come back on the markdowns and the wholesale sector. And so to clarify what is your strategy on these big wholesale clients for you which are very visible in the market and which are applying apparently. Maybe I'm wrong looking at them, but quite high markdowns of your products. So big elephant in the room is Amazon. So what -- how much is about your sales? Do you see back downs in your wholesale in general are higher than the one in your retail? And what could be the weight of this kind of clients at the end of the plan?

So there is 2 aspects. The first one is the markdown, we grant to the -- to our network in terms of commercial condition. It is clear that if they are willing to accept increase in prices, we can, let's say, maintain the commercial condition. In case, according to some specific customers and according to some specific distribution, they are not willing to -- they do not consider feasible to increase the retail price and consequently, to maintain their margin, we are sharing the opportunity to maintain the level of prices on retail of our product and notwithstanding the -- some pressure on the cost so that we can share, let's say, the loss of margin in mass market distribution. This is the -- as far as the discounts of our wholesale, it is -- in my opinion, it was a problem lower than the markdown in our direct chain. And so this is the reason why you've seen, I have simply requested to adopt the same markdown strategy of the competitors and of brands. And the result has been 800 basis points of reduction. And there is still room improve this reduction. So the real issue regarding wholesale is online players, but not the online big players. The small reseller, to give an example, on Amazon, we're going to cut every reseller on Amazon in exchange of a strong partnership with Amazon, demonstrating that their business and our marketplace on Amazon may drive to Amazon higher margin than the small margin of the smaller resellers that are really taking advantage of any small quantities of product. Maybe, Giulio, you can elaborate a little bit on this?

Yes. When it comes to online strategy, I think we have 2 different directions. The first one is to reduce the competition, as Livio said. So we are going to focus on a few selected big accounts and made very solid partnership and also cutting all the resellers that, of course, make the competition higher and higher. The second pillar is getting in control of the strategy on most of those platforms by implementing the marketplace business model or e-concession. So this part has a strong push in our plan. It's absolutely at the very starting point, but we really believe in the next years will be a relevant pillar for our digital strategy.

This is [ Johnny Pitsori ] from [indiscernible]. A question on digital applications. Is the virtual reality of some importance to the development of your products, a. And b, then a financial question on the exchange rate that you assumed in your financial plan?

Virtual reality, I'm really passionate about technology, and we are injecting really a big chunk of technology in all our processes in order to become really speed paperless to reduce the cost to serve. Virtual reality is something different. I'm not so passionate regarding virtual reality. However, we are, for sure, adopting some important tools like size recommendation in the Internet. We are going to invest also in scan in order, let's say, to allow people to better understand the right size in order to avoid returns. If we are talking about virtual dress room or other, we don't have at this date a project on the table. I'm lucky. Maybe, Massimo, do you have any idea on this? But we are just brainstorming. Today, no project -- real project to invest in virtual dress room and so on.

That is correct, Livio. We don't have anything at the moment on the incoming project. But as you mentioned, the reality can be a useful tool in order to optimize the choice for our customers while they are browsing on Internet, and this will have a positive impact in the reduction of the returns in store or on the web.

Let's say still really a concrete approach to technology. Sorry, exchange rate. Exchange rate is always a big challenge. We took really a clear vision in the last 6 months. We decided to cover 18 months. So until mid-2023, we are fine with our exchange rate, more than 120 for spring-summer '22, for winter '22 and spring-summer '23, maybe a little bit less than 120. So for the time being, we are a little bit lucky, 18 months to see what will happen and consequently 18 months to take all the necessary action to mitigate eventually an appreciation of the U.S. dollar.

Shall we open questions also for people outside the room?

Gentlemen, there are no questions registered from the call.

Yes. So further 2 questions on the product and on marketing activities. The first one is that should we expect an iconic product each -- for each season going on like the Spherica or the female for each season, summer and winter. And then I have another question.

Yes. Well, we will be launching newness every season. But to have something that becomes iconic, it takes time, and it gains iconicity by itself. So we will definitely launch new technologies, and we will be launching the seasonal animations of the current iconic. What I can say is that we have got 2 very strong projects going -- being launched in spring-summer '23. And most probably, they will become new icons, but they will gain iconicity by themselves.

Okay. And then on marketing and advertising, is this the approach that you have in the Asia Pacific region with a big and strong testimonial, like applicable also in Europe and Western countries? Or is something that you have in mind for this part of the world?

It's something on the table actually. I can't unveil anything about it. Of course, in Chinese market, we have an average age of our customer, which is much younger, and that was a clear Trojan to entering into the social media platform and get immediate engagement with the right target. As I show, we have a different age group here in Italy. Of course, it should be a different kind of ambassador, a compelling and relevant person to engage our audience with.

I can add just an additional question on the warehouses. You mentioned, Livio, that the Italian one is the ones serving the online channel in 27 countries, if I were not wrong. Are the other ones able to fulfill the orders in the same way? Or you need to bring them up to speed for these capabilities, other CapEx aimed at that?

We are fine with our distribution centers. I mean that we manage directly e-commerce in Italy and Europe. We manage directly in U.S. and Canada, and the distribution centers are able to do the door-by-door fulfillment. Now we are going to open next year the e-commerce platform in Russia and also that logistic center is able to do fulfillment. In Asia Pacific, I mean China, it's a different model. We have many sizes on Tmall, JD, VIP.com and also on the other players. There is different because there is a layer in the middle that do the fulfillment of the logistics and of the customer service because it is clear that there are issues regarding languages and practices specific for the market. So all the brands are using this kind of external warehouses, fulfillment model. So there is no issue regarding volumes and scale. Okay. If there are no more questions, I have tried to write -- just wrap up in order to be really strict. So today at Geox, we want, first and foremost, to exploit a brand opportunity. We wanted to return to grow and reach more and more people conquering new targets in different markets and different market segment according to a data-driven marketing model. We can do it by improving our distribution strategy, optimizing channel management and choosing the right points of sales to position our brand as an everyday premium lifestyle brand and not just a shoe brand. A brand that conveys quality, certainly attentive to the fashion trend yet detached from its rule and cause, a strongly contemporary brand which, for this reason, does not aim to identify in a gender, but to address openly and indistinctly to people of all sexes, age. The reality, we are not interested today in teams, Gen Z and the first part of the millennial. Our focus is 0, 3-year first steps, 3 to 8 years kids, and then 35%, 50% of the millennials, the Gen X for sure and also the boomers. A brand that nevertheless must keep its own image, a family feeling strongly recognizable in its products and in its communication. A story that we wanted to evolve from the functionality of the technology and of the product being the expression of the values of the brand. And brand with the Italian DNA that will be able to strategically enhance, a brand that heart, hearth and technology in his name and that, therefore, must be led by a mindset made of a respect and care for the environment, society and people. Our purpose is we do exist to improve people's well-being on the move. So thank you very much for your attention. Feel free to contact myself, Simone Maggi, our Investor Relations Manager. And eventually, we will address also your question to the leadership team here in the quarter. Thank you very much for your time. Keep in touch.