I would like to welcome everybody very cordially. I'm sad to have to take your time to discuss the material that has been prepared today without doing the necessary analysis of legal regulations, in our opinion, the economic reality. It seems there's a large amount of ill will trying to ascribe malicious intent to our company. This so-called report seems to have been written off the cuff. All of the facts are being adjusted or aligned to a hypothesis given at the very beginning. The authors seem to be lazy. It's a contentious interpretation of facts. It seems to serve only a single person, for persons who are playing short on the equities can earn money. We're going to try to respond to all of your questions where we can respond.
If you have some personal reflections on this report, let me just refer to three things, which are the major things, as it were. When we talk about sales to external entities. The report says we've sold for PLN 279 million. That was the margin we direct. We had a merchandise margin of some PLN 80 million, PLN 91 million year to date. At the end of the graph, it tells how much margin we've actually generated. This is margin. We're not talking about EBITDA, we're not talking about profit. We're talking about margin. This is 34% margin on the MKRI company with similar entities. Selling on wholesales, we had a higher margin. We're not talking about any time or type of increasing margins or generating profits on these transactions. Of course, we were utilizing a franchise agreement. The report says that the revenue trading value grew.
We signed a contract. We started to stock stores, the KSA stores, which didn't have any goods. We saw a lot of wholesale opportunities. This should pad our results because that was offset to the clients because they didn't have the merchandise to sell in the past. If we're to look at this overall at the group, we have PLN 2.6 billion in margin compared to PLN 80 million through MKRI. That's 3% of our margin in total. Of course, everything has grown. Previously we didn't have wholesale sales through franchise arrangements. This is an entity that started working as a franchise operator. Up until now, we only had three franchise stores, two in Kosovo and one in Moldova. We started to run those operations on a franchisee relationship. It's clear that this has grown.
The second topic, this is a terrifying fact. PLN 91 million versus PLN 278 million. The next topic I would like to refer to, which is Reebok sales. The report says that I'm taking tarnished brands in decline. If you could look at Reebok sales, it's 10% of total sales in the CCC channel. These are the results of CCC on its own. We have sales of PLN 290 million. We've increased the margin. Here we see the previous year. In the first year, we went up to 7% of sales with the Reebok brand. Now we're at 10%. We have PLN 290 million in sales. We have PLN 190 million margin. We compare with the global player. I can't state the name, with the leading, best, largest company selling sports shoes. The margin here on the cooperation is only 39% versus 66% in Reebok.
That's PLN 190 million versus PLN 55 million. We can't make the accusation that I'm taking tarnished brands in decline, because I know exactly what I'm taking, if we were to make those calculations. As you can see on the margins generated or commanded by these entities at 39%, this is what a company like KS, which was working with global players, and it wasn't possible to generate such margins. It wasn't profitable. The next slide, please. Here we show the allegation that we're not delivering expansion. We're opening 17 stores. That's 13,100 sq m. That's a lot. If you can illustrate what it means to open that number of stores. Today is the 16th of October. We're opening a very good store in Italy, a second one in Italy. This is a leading shopping mall in Italy with 3,000 sq m.
We're counting on a big success. Just today, we're opening five stores. At that pace, we should continue to maintain that pace until the end of the year, because all of these openings are happening at the same time. There's some organizational work that's required to launch, and this is expansion, which they say we're not delivering. We're going to open 325,000 sq m this year. This is some 30-odd % more. Up until now, we've done 160,000, so roughly one half. But the rest will be opened in the upcoming period. We have to remember that our trading year goes through the end of January, so another three and a half months to open stores. That's what's happened with the calendar. We can't change that. We will try to deliver that expansion.
If you look at the numbers, we might lose a few percentage, and that will be in the first quarter of next year. Let me emphasize that next year we have a similar number. The hypothesis that we're not delivering, all of these tenets are just somehow unconfirmed, taken out of thin air. This report, it seems to us, is pure manipulation. If maybe Łukasz, you would like to say something? Did you want to say something, Łukasz, at the beginning?
Let me just dwell on the financial data. As a person who's responsible for financing this company, I want to say that these data calculations, the impact of these transactions on EBITDA, these things are totally taken out of thin air.
If you make some calculations of the pro rata possible EBITDA versus to revenue, these are extreme high profitabilities of 66% EBITDA on wholesale sales. This type of data is just totally absurd. As the CEO said, it would be very difficult to talk about PLN 279 million EBITDA impact if the margin is only PLN 122 million. That's the first margin. This hypothesis that these transactions with MKRI company have a decisive impact on the financial picture of the company, this is basically like shooting at a fence. Let me clarify one other theme in terms of the auditor, that the auditor had challenged or cited some sort of reference or treatment. We did have a discussion on how to treat certain transactions.
These were transactions with a totally different entity, with a different structure, and the method of recognizing the transaction with MKRI at the time of recognizing this transaction was never challenged by the auditor. This is a typical standard transaction of a wholesale nature. Once again, we can say this is two pieces of information and citing statements made by the company, but somehow they're totally out of whack with reality. Let me just add that the margin of 33% doesn't mean EBITDA, we have 10%-12% licensing fee on revenue, then the margin declines by some 10%. We're around 23%, 21% if we calculate the logistics costs, and we have 180 days of lending terms. We have basically purchasing and other. Basically, at the end of the day, we'll have a 10% margin. That's clear.
We don't have an EBITDA account per business partner. We could say that the maximum EBITDA, well, it would be close to the average. We could say some tens of millions is what is from the very beginning of our cooperation. Well, we have roughly PLN 1 billion in full year EBITDA for the previous year, PLN 1.7 billion. If we look at the previous year, we're talking here about a very low single figure, and the idea that this would be having a major impact, this is something that's just taken out of thin air. We also have a theme that's rather for highlighting some sort of personal ties for making a demonstrative impact. This is some sort of conspiracy theory.
When we make strategic decisions to cooperate with a franchisee operator like MKRI, well, we expected the opportunity to. We acquired a 10% equity stake, and we expected to have an objective collateral in terms of being able to achieve additional equity stake by having an external independent investor. The business partner proposed a solution in which the investment company could join that company, and that was accepted. We wanted to have some security in place in order to be able to acquire, if that's our intent in the future. The expression of that intent is the request for consent to the Office of Competition Protection, then the acquisition could be basically transpired for a symbolic amount. Roughly PLN 1 million, if we talk about this giving, we would have 41%. We had PLN 130,000 for the first stake.
This hypothesis that a possible acquisition outlay would be a transfer of benefit from the company, well, that's just a misguided accusation. No type of outgoing transfer of benefit or value is planned. We want to make sure that you understand that the mere fact that employees of a third-party law firm or persons linked to that law firm are managers in that company, which is an investor with our business partner, that doesn't mean that we're exerting impact or influence on them, and that's not something that can happen at all. That's also important, basically to make that reference, to lay out that point of view.
Okay, maybe we can move on. Let me explain. What about the receivables, payables? This is not only for merchandise. We have two companies. That's KS, the old franchise operator we want to take over and the second network.
This is a new network that's working under our franchise according to the new rules. Let me tell you more. In our venues, our size, KS doesn't have an ability to hire or rent locations according to our conditions. It doesn't enjoy that type of credibility. It can't achieve those rates. It doesn't enjoy the trust of the investors. Basically, we're on a totally different stage now that the rental rates have been adjusted. A portion of that PLN 300 million, well, more than PLN 100 million, these are payables as a result of renovating stores, purchasing equipment, which are done in our sites. These are our sites. We're selling the furniture, which is in that company KS.
If we don't acquire, let's say, if the Office of Consumer Protection doesn't give its consent, well, the loan is for basically commodity that's in our stores and our equipment. We can just take it back. After many questions and after many steps with the Office of Consumer Protection, we believe that in the near future, we should get consent to be able to take control of the MKRI company. Then basically, we're not going to call this debt because this will be within the group. The second topic, there was a suspicion that we're going to write that off. We have a clear contract with that company. All of the merchandise purchased prior to our cooperation. It's not our licensed products. That company's already made money on the licensed goods.
With the old inventory, these inventories are quite old, several years, and they should be utilized because otherwise we would have to sell at a -99% sales price. I prefer to give a 50% discount and sell them in our stores. We should have done the new spring collection. Somebody in the company might ask with MKRI, will there be a loss there? This loss is not consolidated loss. This is something that's totally outside our arrangement. I just wanted to tell you briefly where these receivables came from. We believe in this model, as Łukasz was explaining.
If we acquire the company, this will be PLN 1 million. We've purchased people who know how to trade and basically products, apparel, some production, and we want to have an 80% equity stake unless there's another investor that might join the equation because there are some opportunities if somebody wants to invest strongly. The idea is that at the end of the day, we'll have an 80% equity stake in this business. You should remember that Worldbox is operating on its own outside of Poland. We've purchased 90% of the company for nothing with the competencies, and this will be a business generating PLN 1 billion in revenue with a return of around 30%. This is going to things that are happening with CCC will happen there. Products with high margins. KS has a margin prior to meeting with us of 38%-39%.
In 39%, it doesn't give you a profit in the retail industry. We believe that their margin will be moved upwards to where we are at CCC, and that should happen after the first year of cooperation. Now we can invite you to pose any questions you may have. Basically, we have at least 3,200. That's in new stores. The warehouse has 32,000 sq m in Gdańsk, and we're serving all of our international stores. There's a lot of strange errors in this report. Please draw the conclusions.
Let's move on to the Q&A session. This is what the CEO said at the very beginning. In our assessment, everything else is supposed to create this sensational narrative. We're walking through this point by point. If you have questions to individual tenets or postulates in this report, we'll respond to them. I just want to mention one thing. We believe this entity doesn't have. It's not registered anywhere. Domiciled in it. It's not credible. This is something that we should reference.
I'm Jakub Kowalczyk from Citi. What are the next steps linked to this report? Of course, we're all aware that this situation transpired in the past with respect to another listed entity in the Warsaw Stock Exchange. How does the company intend to react to the situation with respect to the legal side of things?
I don't want to let this go, but we have to analyze everything, we have to prepare, we have to understand who we're dealing with, what sort of governing law is in play. I don't let things like this go.
As we wrote in our declaration, we're considering legal steps. We have an organized day, because we've been working on this from the beginning of the day. It seems that questions were being posed, that something was in the air, as the CEO said, we're looking at this and we're not going to let this go.
Mr. Kujawski, I see that you're raising your hand.
I think it's good for us to explain, I see we have 260 people on this call. Please post your questions. If we don't know something, we can bring down, put together, compile the numbers, and provide them to you.
Maybe even 400 people are present on the call. I'm very pleased to see such a large turnout. Mr. Grzegorz Kujawski, Michał Potyra. We'd like to invite you to post questions. Mr. Kujawsk i from Trigon.
I have several questions. We see the scale of the trading volume with MKRI of PLN 300 million. The question is, what is the level of receivables linked to the transactions with this entity? One other thing, at the end of the first half of the year, we see PLN 560 million is a general amount of receivables. Overall amount of receivables. What is the overall amount of receivables in terms of wholesale sales? That's my first question.
As you can see, PLN 357 million from the beginning of cooperation. That's what we've sold up until now. If we look that there's PLN 120 million in, that's basically we're getting money in. Well, these are new receivables. These are new stores. We have opened more than 100 Worldbox stores have been opened. These are fresh openings of stores, so recent openings. These are openings that took place in the recent weeks, so they're not overdue. We have 180 days turnover freeze, so that's when the payable should be paid.
If we take over the stores, then we have a PLN 100 million facility to have a better liquidity. Then we can go and get a loan. These aren't things that have been lost. The stores have been rented out by us. We've sponsored the furniture as well as the merchandise. This is an independent company which is a franchise, but as soon as we take it over, then we will have it in our balance sheet, and we won't have any overdue receivables. Utilizing MKRI to grow. It's working capital or you're investing somehow in equipment. The report says that we have products that aren't rotating very well. But if you look at Worldbox, you can see how much merchandise that has been ordered by KS.
Of the PLN 360 million sales, which is in KS and Worldbox, do you have the feeling how sales are going, what sort of margin you're achieving on that sales? Because you have receivables on one hand. To what extent are the sales being-
You shouldn't talk about PLN 360 million, because if we have PLN 360 million debt minus something, it's only PLN 180. They've already sold something. They continue to pay us. PLN 360 million is one and a half years, something like that.
We can say that it's regularly being paid. We don't have problems in terms of uncollectible receivables. These are amounts that are being paid on a regular basis to the extent to which we have an ability to look at the results of a company we don't control. We have that insight, and we're strongly interested in what's happening there. Up until now, the company is in a mixed period because they're selling down some of the old inventory, but to a greater and greater extent, they will sell our products, our merchandise.
This is for the autumn and winter season. But in the full-blown approach, this will bring since summer of next year, and the margins that are being commanded are very good, especially on our merchandise, because this is licensed merchandise, and the sales growth figures are very good. We have high double-digit figures. We can say that we believe in this concept.
If we look at this table that you've shown us, where you have the sales results in the first half of the year and the margin on that entity, and you've shown us the year-to-date figures, which shows that third quarter was PLN 100 million sales, and this was with a margin of roughly 10%, which is clearly below what you had in the first half of the year. What sort of period are we talking about?
We're talking about Q3.
When the margin fell Our merchandise was starting to be sold basically in September, so that party still had a lot of its own inventories. It had brands that aren't in our growth strategy, like Jenny Fairy and some of these others. If you look at the debt structure composition, these are all new liabilities.
Why the margin fell, in Q3 we made the deliberate decision, and this shows we're not looking at a short-term maximization of margin. We lowered the margin because of the higher and higher volume of sales in order to leave a little bit more money.
Perhaps my last question, because there were some allegations I didn't understand. We're talking about our margin?
We're talking about our sales margin because the table that we showed says that we had a 43% margin in the first half. If you look at year-to-date, if you incorporate a portion of Q3, this suggests there's a 33% margin.
The business is bigger and bigger, and of course we're going to bring down those terms and conditions. Thus, we have a lower margin for Worldbox than we do for other wholesale buyers.
It's only 10% in Q3.
You also mentioned that there are licensing costs. I wanted to talk about these licensing fees because there was a statement made by the CEO.
Just a moment. It's hard to understand the model because it's a smaller margin, because he has to pay the licensing fees. He's going to enter into a system that will pay the licensing fees on retail sales as opposed to wholesale sales. This model is continuing to evolve. It's quite difficult.
What is the weighted average licensing fee that you as CCC will pay? Because the information suggested that it was a 10 percentage point. Is this going to be weighted by the brands you have?
There are two licensing fees. One is for retail sales, and this ranges from 4% to 6%. This is the retail sales, basically licensing fees. That lowers the retail sales by 2%, and it's always higher in wholesale. It's between 10% and 14%, based on what I know. I said 10% - 12% because I took the middle of that, because that's what we've been paying in the past in wholesales. Now we have an arrangement with Bank of Egypt that we're going to have everything sold in a single channel. It's going to be compiled in a single change. Worldbox would be paying the licensing fees on sales.
In terms of these allegations regarding the HalfPrice model, are you capable of delivering a trading update because we're close to the end of the quarter, or do you intend to release a statement prior to the trading update to be delivered or published on the 10th of November?
Which stores are we talking about? Should we say something about how sales are running in Q3 in Worldbox?
No, just generally in CCC at the group level and HalfPrice. I think you were interested at HalfPrice in particular. I'm thinking about the business model.
All right, then we have MKRI as well. Do we want to give a comment? We want to basically deny those allegations. In three weeks we'll publish the results. Recently, we got hit over the head twice because we had soft preliminary sales, then we had the consolidated sales, and the market basically marked us down twice. Maybe in the future, the market will reward us twice, things should change. We would not like to speak too frequently about results.
I also have a question from Michał Potyra
Thank you very much for the opportunity to pose the question. My first question, because I have several, I don't know if you will react to that, because there are some allegations here that the company, you, [inaudible], are controlled, in fact, by a trusted person. I don't know if you could say anything about Mr. Oleś. There are some allegations that there is Gnyp and Raftowicz who are, in fact, responsible for contacts with the company. That is the first question. The second question is a specific question. How much, in fact, cash have you received from the sales this year? The third question, maybe it is a little more about the essence of the business. If you could remind us, where did the idea come from to cooperate with this company? It does not have any assets or great successes in business.
Why wouldn't it be easier to do this Worldbox alone from the very beginning with a clear ship? Why are you taking this over? What do they have? What is valuable to you as such a large company? Where is the value?
Perhaps I will try to respond to these questions. What are we actually buying? We are buying existing trading volumes, certain competencies or skills. The trading volume is very small. Basically, this is an empty shell. I do not really buy that argument. There's 150 stores. PLN 200 million, that's a small amount of sales? In comparison to CCC, of course, you would probably do this in a very short period of time. That's probably true, we made this decision one and a half years ago that it would be easier for us to obtain licenses from all the brands.
We didn't have licenses for producing the shoes, one and a half shoes. When I was trying to get a license for apparel when I had HalfPrice, it wasn't going so well. When I said I have HalfPrice plus the Worldbox apparel network, I received all the licenses, which it seemed previously that I couldn't get, like previously. Reebok, there were many things we were able to source. I received rights to produce apparel, this is the basis for this business. I needed something that exists, something that, well, according to American licensing companies, this would give me the right to basically produce products on those licenses, on the basis of those licenses. We have design offices, which is in Gdańsk. We have a logistics warehouse.
We, in the second part of the business, we're benefiting from that because 100% of the rest is owned by us. I think this is a good starting point for the business. We didn't have to pay anything for that. Basically, we took that. We've helped them restructure in such ways that CCC is in the background. All of the receivables debts that were reduced substantially with respect to MKRI. Basically, all of the old topics have been squared, some things linked to the tax office, the banks, roughly PLN 50 million, if I recall. We had a network of 130 stores with 190 sq m average. We have an asset.
Basically, we bought people, we bought an asset in the form of a network. We haven't bought the company. We want to buy the company. That was the idea, the concept that we had when we entered that. I think this is going to be a successful acquisition. We'll receive the consent from the Office of Competition Protection, you'll see an impact in revenue and margins. There was a structure that was in place there. Please remember, what did impress me in that company, that over a four-year period, during COVID, without having profit, they were able to develop, they expanded to 130 stores. Well, you can't earn a profit if you have a 38%-39%, especially if you have higher rents, higher costs to purchase goods. It's not possible to generate a net profit on that. That's why this company wasn't profit-generating for the last four years.
Well, there was also the first question. I think we already talked about that in terms of the ties. When we entered into this strategic cooperation based on franchise relationship, if things are successful and all of our targets are met, KPIs, we could acquire the company. We wanted to have an independent, credible entity in the shareholding structure that we would have a secured way in which we could take over the controlling stake. There is an investment company involved that was helping this law firm that has been working with us for many, many years. That's about it. This was more a matter of our security, to secure the interest of the company, as opposed to any other issues which are somehow implied here or alluded to.
But in terms of the PLA, well, these are technical powers of attorney where employees of the company receiving that in order to participate in technical transactions or activities relating to the shareholder meeting. These are just related to structural or organizational issues, no strategic things. This is just a matter of being able to run shareholder meetings. You've probably participated in shareholder meetings at CCC or other companies more than once. One proxy might have to hold proxy statements from many different shareholders. Basically, that person is charged with the task of discharging the voting rights. But I think we also have financial statements have been signed as well. This looks like it was a little bit more than just that. Well, basically, this is to approve financial statements. Nobody can sign financial statements. It's only a matter of approving them on the behalf of the shareholder.
Okay. Maybe my final question about cash flow to CCC in exchange for those inventories.
Well, there's no overdue amounts there.
The chartered accountant, the auditor, has looked at that and nothing was challenged. The entity is preparing according to the schedule that it's received. If the payables are around PLN 300 million and they bought for PLN 350 million, that means they've already paid PLN 150 million. We can give you those figures.
Well, some days, today the overdue amount is around PLN 12 million-PLN 15 million. This happens for one or two days. This is nothing significant. We have now and again, these type of delays, everything is being paid on.
I just wanted to make sure that I've understood. I don't want to make a mistake here. You've sold merchandise for PLN 350 million, and you have receivables of PLN 330 million. That means you've only received PLN 20 million.
We also have renovations because, well, there are liabilities 1/3 or more, 40%. This is basically for CapEx and to prepare the stores.
You renovated these stores that you don't belong to?
Basically, these are our stores that we've leased to a franchisee. All of the lease agreements are held by us. If something doesn't work out with this acquisition, we would have our own stores, which we are actually leasing to third parties, to a franchisee. These are standard practices of large-scale franchising relationship operators. We've sponsored the furniture and that party has to pay for that furniture. For many stores, we receive furniture that's already ready.
Well, you talk about, I mentioned sponsors. We've produced this furniture because we have good contracts. Second, we have good terms and conditions, we know what this concept should look like. That's why we're doing it this way. That's why the receivables are higher. The second factor for the divergence here is the net amount and receivables are gross. With VAT, you can't treat this one to one. I didn't mention that this sponsoring relationship was based on a fee.
Ladies and gentlemen, the situation is that we're moving forward with expansion more quickly with this network than we had anticipated because we have very attractive sites or venues. If I have an OCR arrangement where I have to pay just rent as a percentage of the trading volume of the revenue generated there, all we have to do, I can't let that go past.
I have to take advantage of those type of sites and that company in theory doesn't have that type of furniture. They're not capable to afford very fast growth. We're doing this expansion very quickly because we want to acquire the entity. That doesn't mean we're not doing anything else because in Worldbox it's 12%, 13% of our expansion. That's not the most important expansion. 60% is for HalfPrice stores. HalfPrice stores in terms of Europe. Number two is CCC, number three is Worldbox, and then we have eobuwie.pl or e-footwear. e-footwear at present is marginal, a couple percentage points. This is a result of a breakthrough. We're in the days prior to the acquisition of the company, but we don't want to lose or squander the season.
You can't compare PLN 200 million from previous year because that trading volume will grow substantially. The number of stores, the number of square meters. We have 600, 700-meter stores as opposed to the 200-meter stores in that price. It's triple the size. It says that a company whose sales volume has fallen now suddenly are getting. Well, basically the business is three times larger. That's true in that sense.
We're looking at the data where we're stocking up stores for upcoming months and we're preparing previous years where MKRI was basically dwindling. Its net sales, we're down to PLN 180. Łukasz mentioned very quickly these are receivables that are gross. You have to incorporate the 23% VAT tax. It's a net statement versus a gross statement in terms of those financial receivables. It's not the case that MKRI is getting old merchandise. We're not talking about old merchandise at all. We're not talking about any type of corrections or returns. All of this is being sold in those stores.
If we could ask for some additional clarification from PKO. In terms of the sales you're reporting at present and the level of sales, the gross margin, what's the impact on your result up until now? I thought when you calculate the EBITDA, it was the margin. If we look at Q4, it was just 41% and that would more or less correspond with the margin that you're publishing now. I think it was 41%, that was the impact on EBITDA. The licensing fees, should we subtract them with respect to Worldbox sales? That would be my first question.
I didn't understand your question. Do you understand this 41%? I didn't understand.
I understand you had assumed that 41% of the margin, but the new information is that there's a licensing fee. Is that what you have in mind? Generally speaking, we do pay a licensing fee because this is wholesale sales. That trading volume is subject to a licensing fee for wholesale sales, but I understand your question.
The question is, when you made that acquisition, it was a 41% EBITDA impact. That was a result of the movement of the sales. I'm just surmising, probably you had licensing fees that should've been restated in a different period. The specific question is, where is the EBITDA impact specifically? That's quite interesting question with respect to this transaction. Łukasz, please tell me, where are you talking about 41% impact on EBITDA?
The margin we generated. Originally.
We're talking about margin, not EBITDA. That's margin, not EBITDA. If this assumption is not correct, that margin and EBITDA are the same thing.
Because we had licensing fees, logistics costs, production costs. Licensing fees were 10%-12%. We also have the marketing costs and the financing costs, and all of that was covered within that 41%. If we make the final calculation, the margin, EBITDA margin, on wholesale sales was around probably 20%.
My question was, if we were to look at the wholesale sales, if it was basically restructured in Q4, and then the EBITDA fell. That change was 41%. This would suggest that that was that margin.
Perhaps those type of technical questions, maybe we can do that offline, or we can have a follow-up meeting because we have a lot of people here.
I have a few more questions. If we look at the Worldbox results for H1 of this year, or do you know? Maybe I'll just pose all of my questions. Do you later plan to incorporate basic Worldbox results in future sales results? I think this would be advisable. I've mentioned that, so I think basically what's presented here is highly divergent from what you've presented. I think you'll be happy to present these things. We're talking about Worldbox, what the amount is. It would be nice to hear clearly what are the specific receivables from MKRI at this point in time. I think that would be more or less all of my questions.
If we talk about the results of MKRI, they're negative, but we've already explained what the source of that, because they were selling down inventory, their historical legacy merchandise of inventories.
At the end of Q4, Worldbox will be consolidated. We can think about how we should approach reporting Q3. We'll give some consideration to these postulates that you've put forward. If we talk about receivables, the current level of receivables is roughly PLN 350 million, if I remember correctly.
Well, everything changes because if you have inventory in stock and it's been turned over, we'll have this period where stores are fully stocked. Then as the sales take place, these figures will fall. It's hard to say that 300's big or small. We're explaining that PLN 300 million, that's PLN 120 million we have to CapEx for stores. If the people who wrote the report say that suddenly something, these receivables moved up 112%, that's true because we opened up a totally new area of operation.
I'm here to open up new businesses to see where the company can earn money, how it can continue to grow and develop. This is natural, whether or not you like it or not, receivables grow because that company doesn't have any money. We assume that within the next few weeks, this will be our company. We can't allow a situation to acquire where this company wouldn't have any inventory in stock because it would be our company. In our stores. Worst case scenario, if something were to happen, we would buy back the goods. It will either continue operating in a franchise. We have two different models. We have the old KS where they took products. We have the new network, which is Worldbox under a franchise operation. They're buying inventory. We have 250 stores.
In total, they have 250 stores. All of that's on our shoulders. We have to stockpile. We have to put inventory into that network. If we don't put inventory into that network, it will fall. It would be sensible to take it over. Another thing is that these stores are in shopping malls. What is the problem with actually putting the stock, the inventory in these places? We're getting the best locations. You'll see that these are very good prime locations. Worldbox in the next one to two to three years will be a dynamic, well-known network. We haven't done the marketing yet. We've not yet introduced all of the licensed products.
If we think about this logistically, the Worldbox client should buy more than the CCC client because you have the ability to buy shoes and socks and bags and footwear and apparel. I believe in this model. That's something that will be maintained.
We have a question to be posed by Sylwia.
Thank you very much. I've heard that you expect to receive the decision from the Office of Competition and Consumer Protection. Could this report affect somehow the decision to be made by UOKiK?
The Office of Competition and Consumer Protection.
It's all bullshit. There's no truth that it's suggesting something to instigate an atmosphere, to create an atmosphere.
I just wanted to ascertain that fact. The next question, what will be the impact on the balance sheet? That's probably difficult to assess following the consolidation. I understand that the receivables will disappear. It will be part of the fixed assets because we'll have the investment you made into the equipment. We're talking about PLN 120 in CapEx, and PLN 180 for inventory, or it could be bigger.
It'll be an intragroup inventory figure. Something around those numbers. In three months, we'll make that assessment. That's when the acquisition would transpire. That's more or less what things would look like today.
Are there two types of inventory?
We have old inventory, which has to be totally sold before we acquire the company, and then our product, which will not be written down, because we've already agreed with our auditor what we can do, what we can't do. The auditor is very sensitive to these kind of things.
In principle, this is what's going to happen at the end of the day. All of the inventory will be our inventory, and we just have to make sure that the rotation turnover days, the sales are running well. How many people are on this call? 350 people are participating in today's conference call. I can tell you this is going to be one of my better ideas. This is what I'm thinking. I see the type of inventory, the type of products we're buying, the sales. We've got good retail sales, price points. This is something that should work very, very well.
Is there a warehouse?
It's written that the warehouse is in Tychy, 3,200 sq m. Somebody made a calculation error when converting from feet into meters because they moved things up from 1,000 to 3,200 sq m in terms of upping the lease space, and that's somehow supposed to be the reason or the circumstantial evidence showing that we're somehow fudging things. We have 32,000 sq m warehouse, which is for Worldbox across Europe, and that's going to be the case for the next few years. This is located in warehouse. We have different warehouses. We have one for MODIVO, we have one for eobuwie.pl we have in Podkowa, which is for CCC and HalfPrice. We have different warehouses across the country and of course it's true that we have a warehouse if somebody's asking that question.
Do you maintain what you said previously that the inventory at the end of the year should fall substantially if there's too much, and that you're going to have a lower level of inventory in upcoming quarters?
Yes, we want to have 35% less ordered for the fall, and this is something that's worked very well up until now, and 30% less in the spring. We'll have the growing building. You will see, of course, substantial improvement in upcoming quarters.
At the end of Q3, we'll see substantial decline. We anticipate that there'll be further decline in Q4.
I said we had all of these deliveries made or it was on the sea that was contracted. In basically September and October, we're selling the goods, so you can imagine the magnitude. If the products are being delivered and we were supposed to not talk about other topics, in fact. Okay. Right.
My final question. I've understood that the auditor is aware or cognizant of all of these personal links, and he's very well aware, and he didn't have any caveats that this is not being consolidated according to the full method as of until now.
Not yet, because the auditor is aware that there's going to be full consolidation in the future. Please remember that we have a franchise arrangement. To some extent, we order what the nature of the trade is, what type of products should be displayed in the stores. They have things that, in many cases, that as MKRI, they're able to make decisions on their own.
In terms of the product, the display in the stores, this is a decision made by the franchise owner. We have a situation in which in the new Worldbox stores, they are following our commands or orders, the stores we want to take over. Basically, this is full exclusivity. If you take a look at the KS and Worldbox stores, they're totally different. In KS, this is basically sell-offs, outlets have basically been set up, whereas Worldbox has a full range collection.
How many KS will be closed up until the end of the year, and how many Worldboxes will be set up?
The KS stores will be closed if we find a store for Worldbox in the same locality. We have 100-300, average 180 sq m in KS. I don't want stores like that. We have the average size of 627 sq m for Worldbox, and we have 27 brands. We have two or three options with adidas per month, and we have several of our own, Americanos, Frandos, it's our own brands, and Goldstar. It's basically three or four of ours, and the rest of them are licensed products. It's high margin products. We don't have room to cooperate with brands that won't deliver high profitability. That's what Worldbox is intended to do. For this to take place, you have to give us a little bit of time. You have to give us one or two more quarters, and then you will see the fruits of our labor. Basically, this is a slightly painful moment when we have to basically sacrifice certain things like margin or doing sell-offs, and you have to stop or close stores and write down things. It's a relatively small magnitude. This is something that will last maybe two or three months, we'll be moving downhill.
Thank you very much. I can give the floor to Mariusz Bartodziej from XYZ.
I have really one question. Mr. Chairman, in terms of the intended acquisition of the stuff that you've been impressed by what the current owner has been done, that they've been able to expand the network over four years during COVID, even though they weren't earning money. Basically, should this be a red lamp, or are you actually impressed? Basically, he was just burning PLN millions in cash, and now he's selling the business free of charge to some extent, basically.
Of course, he could have continued, he could have endured, had he had a bit more luck. I don't like certain brands because they're not my brands, and he has to get rid of that in order to focus on the high margin brands. I don't want to have Jack & Jones, only Gap for 40% final margin because you can't survive in that. I have the second margin, and I have to have a decent margin in all of the stores that we have. The highest margin that's possible in a given industry, the max that you can achieve. Well, we're showing who we're working with. Take a look at this, that these two brands at the top and at the bottom, we have a 40% margin. This is going to be a big success. The other two or three brands are Americanos, Frandos.
We have Americanos jeans and then Frandos is inexpensive sport athletic stuff. 60% margins. The higher margins will be 70% and above. These are licenses that we've been able to access thanks to our cooperation with KS. If we would have an apparel full price market, then we wouldn't have those licenses. That's what things were looking like. This was a breakthrough moment that I have a network, I have 150 stores, and I won't have the licenses, so please grant those licenses to me. These licenses belong to somebody that had to be retracted or taken away from those persons. They exclusively had to be taken away from us, so it had to be conferred on us thanks to the cooperation with ABG. It said, of course, that I'm taking fake brands. That's untrue. I just came back from Morocco.
I was there with Jamie, and we have some very wonderful ideas about new brands, and you'll be quite surprised to see the brands that ABG is buying, and all of this will be part of our trading in this region. Brands, all of these brands with a little bit of marketing will be working in our region. By their fruit, you will recognize them, it is said. You'll see once I have all of the products prepared for licenses in the stores.
If you have any other questions. Thank you very much for the-
Now from mBank, I have several questions. My first question is about MKRI and the acquisition of control. Will acquisition of control and holding 51%, or we have full control of 100% of the shares of MKRI?
Well, we've agreed that 20% will be retained by the owner. Of course, the condition is that he has to work for that. He has to build sales teams. Generally speaking, the split will be such that they'll be responsible for the products, for the production of the products, and for store operations, and for logistics quite a bit for this time. We will develop Worldbox ourselves on our own outside of Poland, and perhaps we'll have roughly somewhere between 51% and 80%, and the company will clearly have control. This will be a very big partnership if that entity makes that decision with respect to the Polish portion of the business. The entire international set of operations and Worldbox would be whole-owned by the group.
That PLN 1 million is to buy up to 51%?
We've paid basically PLN 100 and somewhat thousand. Basically up to PLN 500,000.
If this is a topic, this is what it's going to cost. The overdue receivables in the financial statement above 180 days, I understand this does not pertain to MKRI in any way, shape, or form.
Perhaps a portion. There might be a minor amount that reflects on MKRI. It's going to be something minor.
My final thing, in terms of licensing fees, forgetting about MKRI, but in the CCC business, is it in the gross margin or is it in OPEX?
It's in the distribution cost, and it has always been there in the selling expenses.
In terms of Worldbox, will it be somehow reported differently?
In Worldbox, from the point of view of a consolidated account, we'll do it the exact same way. We're saying that the margin around 12%, this is after deducting the licensing fees. Historically, the 41% margin that we talked about in the past, this was prior to deducting licensing fees. Both were presented in the P&L in both cases.
This was basically in the own cost of sales. In Q3, the EBITDA margin that you will generate through this wholesale sales, what level will it be at?
We can say that the 12% margin is going to be close to the EBITDA margins. This could be around 12% for the transition period up until we acquire control.
If we want to pay the same amount, that's what ABG owns, for the same amount across all retail channels. It's more beneficial for us to pay 10% from the bottom as opposed to 6% from the top. That's clear. There's still some discussions, partnership discussions, about what should be the basis for calculating the fee.
Is it wholesale or is it retail? Is it yours or not yours? This is something that will be ironed out. We would like to bet against the wholesale base because it's less expensive. Wholesale sales that will be outside of our channels, there will be a license fee that's paid on wholesale sales as opposed to retail. If you're selling something for PLN 40 in wholesale, then you have to pay 10%, so PLN 4. You pay 6% in retail. This is the dispute between. It's 50% more in retail, 6 as opposed to 4. Most licenses are conferred in wholesale because you have distributors that are buying things, they're looking for orders. We have a simple case because we're selling immediately retail, so we're more efficient as a licensee as opposed to partners that take these licenses in wholesales.
Perhaps it'll be a little bit easier for us to negotiate and take away licenses from others. Okay. Thank you very much. All of this is the transition period for the next quarter. I think you'll understand our business more once we complete that.
It will certainly be more transparent.
If somebody's saying that, as this report has allocated, that I've artificially pumped results for wholesale sales, that's a joke. You can see what the margins are, what were the revenues. Somebody mistook margin with the revenue, and this is certainly not EBITDA.
Thank you very much. We'll give the floor to the next colleague.
I'm Mr. Krawczyk from ODDO BHF . I hope you can hear me. How many wholesale clients do you have now?
I think we showed a slide. I think it's around 50.
I understand that this correction in the prelims for Q4, this was linked to a single customer.
Yes, it was one single customer.
It was a large customer opening up the trade for Africa and the Arabic and African countries. He says, "If you pay for that, then we'll post it." It was retracted from the financial statement. I think somebody mixed up these two things from the report because this was retracted. Go ahead and speak to that, if you would, Łukasz.
We have a totally different situation, different case, different instance, different transaction model. Now it's been encapsulated into one. This has been challenged, and we're continuing to do that.
These are two totally different situations that have been mixed up. Was this an international entity?
Yeah.
No. We're talking today with ABG about one very important license, and if this works out, well, then we'll have wholesale across the world. The entities we're trading with. Also, Intersport, OBC, and you've got all of those people with licenses. Generally speaking, DC, Quiksilver, Reebok, Kappa, Element. What we want to do is we want to open up, because we have questions from ABG, can we cover Europe or will we not be able to cover Europe? Because if not, then they could take the distribution away from us in Europe and give it to somebody else. Now we're thinking about whether we want to do the wholesale sales across Europe. I think we'll open 370 stores this year.
As you can see, we're opening four to five stores a day. That means we have quite a bit of work to do. Wholesale is something totally new for us, and it has its own pace. It has its own large number of equations and templates. We have different types, 40 samples, 40 odd samples, because they want to have samples in each one of those countries. This is a totally different business. We were giving quite a bit of consideration, and we're pondering this extensively to think about how to approach that.
Having these licenses for Spyder and some of these other, we have many licenses that we have for the entirety of Europe. There's a lot of pressure being brought to bear by ABG, because if we're not going to do all of that, they should take that away from us. We have to make a decision here in the near future with respect to wholesale sales. There's a little bit of anxiety. We're doing it, and it's been well-expanded model. We have totally different people. We have the headquarters in Warsaw, in the Metropolitan building in our headquarters there. They're trying basically to capture customers, because these brands, there are a lot of things that we're not selling. You have skis and you have skateboards and things like that.
These are things that we don't have, and we have to distribute that for that brand to be cool across the board. Is there something else?
One other thing. If I look at the cash from MKRI, basically, you've received PLN 20 million.
We've received much, much more. We said we shouldn't compare receivables with sales because we also have sales, we have CapEx. I just don't remember exactly how much we've posted in credit to our accounts. I would say it's at least PLN 120 million.
Okay. How much overdue debt is MKRI, that's how much of that?
There's not much because it's paid the bulk of that. This is one environment. These are the same suppliers. Even if they haven't paid some companies, HalfPrice is working with these companies.
MKRI, well, a lot has been forgiven, basically, I would say that they've paid back half, and they have an alternative of continuing to cooperate in these channels. For many networks or suppliers, it would be quite painful to lose us as a buyer. They understand that we're standing behind them in the future.
Basically, this will be solved in the next few weeks.
To a large extent, it's already been solved. They have settlement arrangements with the banks and with the tax office, and there are certain schedules that have been put in place.
It's about within it. To respond to your question, it was PLN 134 million, precisely.
Thank you very much. That's it.
Ladies and gentlemen, it's not the case that this party is not paying. Honestly, he would prefer to have a smaller scale expansion. I'm the driving force to do this as quickly as possible and utilize the situations that we have, these sites that are opening up for us to utilize. That's why we're bringing pressure to bear that we're earning money on everything. If we're not earning money on the wholesale, we'll earn money basically as a consolidation as we incorporate the network. Piotr is coming back with a question.
I wanted to get some additional precision here. I didn't understand one fragment here related to the licenses. You don't know what fee rates you're going to be paying, you're already booking or expensing this against Worldbox.
We'd like to pay the 10% KS on wholesale as opposed to 6% on retail trade, because it's more economical for us to do that in wholesale. If we have PLN 20 that we buy, that's in wholesale, we're selling it for 30 with these margins, we would pay PLN 3, 10% of the on-sale price in wholesale. If we're paying 6% in retail trade, where we're selling something for 100, that would be six as opposed to three, double the amount. We would prefer to pay against wholesale, ABG understands that it's going to be yours. Up until it's acquired, we would pay basically on the wholesale basis. After the acquisition, we would pay on the retail base.
One other question, because you have the short seller talking about the EBITDA figures. It has calculated somehow is misguided, but you haven't stated your estimate because this is the gross margin. You've talked about licenses and different products. It's not really clear. Perhaps you should consider whether or not it's worthwhile to state a given figure or reference point.
There's a bit of an understanding, but to some extent, we've just surmised certain things. That's something that we could do. If we have a 33% margin, a 10% fee, that means we have a 23% margin. If we have a 23% margin, we have a six-month term of payment. That's another few percentage points. If we talk about the logistics costs, warehouse operations, collections, investors, buyers who have to be involved. We're going to be able to retain, let's say, 18% margin and the EBITDA margin. It's something that's similar to our EBITDA, to our general EBITDA. I was saying that the impact on EBITDA, well, it's not at all, it's absurd to think about the EBITDA level in terms of the inquiry wholesale sales.
This is the only wholesale sales, basically, it's the Worldbox with products in the fall period, in the autumn period. You can see these are all new products. They're not overdue products. It's for the current collection, autumn and winter. These liabilities or payables aren't overdue because they have 180 days to pay. That's what we've agreed to do. If he slips through that 180 days, nothing will happen. It's going to have an additional 30 days. Nothing bad is going to happen because we'll orchestrate or finalize the acquisition to that point.
I estimate that this is a PLN 50 million-PLN 60 million impact from the beginning of the cooperation. If we wanted to add in on a fair basis all of these costs and allocate them and put that into overhead or sales and general administration, then we don't really have EBITDA calculated per individual business partners, and it's somewhere between PLN 50 million and PLN 60 million. This has a pretty insignificant impact on the overall group's result.
Of course, this is something that can be estimated. It's 3% of our revenue, 3% of our EBITDA, because the EBITDA and revenue calculations should be more or less in line with one another. I don't see any more hands raised. Are there any other questions that you would like to ask? Our conference has been underway for 1 hour and 20 minutes. I want to make sure that everybody's fully aware of what's happening.
I want you to have certainty and assurances with respect to this report that came out. Generally, I'm surprised that somebody can do that. You can write this sort of possible and just basically generate a big storm on the market. I didn't think that this would happen to me after what happened with LPP. Some questions were posed about me to the employees basically whether or not I was thinking that something could happen because some business intelligence units wanted to have me give them an interview under these shorting transactions, I arrived to the conclusion that something has happened. It's good that the issue has come to the forefront. Now we have an open discussion, if you don't know exactly what's happening, then please ask your question, and we'll provide responses.
I'm from the [Santander TFI]. I wanted to ask you about the furniture. Is this a sale of furniture from CCC to a franchisee?
It's a sale with 180 days. Is there a margin? We're helping our franchisees set up a store. We're selling it to that person, to that entity. This furniture is located in a store that we've leased, so we can take the furniture back. I don't anticipate that happening. The question could always be asked, what's happening to the CapEx if you don't get the consent of the Office of Competition and Consumer Protection? We thought through that, and it's in the Worldbox stores that we've leased. Did you generate a margin within CCC based on the sales of furniture?
We have a minimum margin, basically to offset our involvement. Year to date, it's PLN 16 million of margin. Margin. You're talking about the margin. The PLN 16 million is not incorporated in the data presented on the slide. What we're talking about here, this is wholesale sales. This margin is on top of that.
Thank you very much. What about the revenue for that?
What sort of This is the sales line item, revenue from sales.
I think you're speaking incorrectly. You have a 5% basically markup and then the financial expenses. If we calculate financial expenses, then we would have a 5% margin.
You're talking about this is on top of that sales?
PLN 120 million. This is on top of PLN 120 million in sales. It's a little under PLN 100 million. With VAT, it's PLN 120. The PLN 120 is a little under PLN 100 sales plus the VAT.
Then we have the 5% markup and then basically financial expenses. It's like 2.8 per month, basically. The margin is there, and then you have debt that's to be paid within 180 days. We had to pay the supplier for the furniture. This entity received basically six months, so it's going to be possible for that entity to earn money to pay for that work.
Which line item can we see the sales of furniture?
This is a sales support.
Which segments?
Segment. In the CCC segment.
The stores where the equipment has been installed. How many stores have been outfitted?
More than 100.
It costs that much, PLN 100 million per store to have the furniture?
Yeah. You'll see we don't have lamps and things like that are also incorporated. Just a moment. Furniture, that's EUR 240 per square meter. Some aren't turnkeys, so it's not just furniture.
I would think furniture is 60%, 40%. This is something that we can write out. We're talking about the total CapEx. Sometimes stores have the furniture, sometimes with an external company, things were done. We have different models that are followed, that are used. In the ideal world, we have a turnkey solution and the furniture is sponsored. That's roughly half of the stores. In some of the cases, we don't have such convenient conditions. The PLN 120 million, was this proportionally spread over the three quarters of cooperation? This would also affect the perception. I don't think we recognized those costs. I think they're the ones who are recognizing those costs. Łukasz.
We're talking about the sale of CapEx? I'm talking about the sale of CapEx. There was less. Roughly half in Q1, less than 40% in Q2, and a similar amount we should see in Q3.
Piotr, we have to check such detailed things, what was invoiced in individual quarters, and then we'll respond to your question if you want to hear the response. The fact is that we're sponsoring the furniture and CapEx until we acquire the company. The number of stores that will be opened will need to be sponsored, but we're building a bottom. We're building a network that should bring in PLN 200 million in profit next year.
Any other questions? I don't see any other questions. Somebody else want to take the floor? You have your mic turned muted.
I'm from Investor. I wanted to ask a few questions about the furniture and inventory, because if consolidation transpires, then the receivables will become part of the inventory, and of course, the furniture will become part of your fixed assets. Should I understand that you have already achieved a certain margin? Well, that means that we'll recognize the results twice.
No, why? No, we wouldn't recognize it twice. Once inventories are internalized, then in the future, we'll have a possible margin on top of that.
Yes, I understand.
We've recognized the sales where we didn't receive cash because we already mentioned that PLN 130 million has been paid.
As time flows, we receive the pro-rata portions. The best period now is for Worldbox because it's cold. Coats are being sold, we assume that the bulk of this will be paid prior to acquisition of control.
I understand we shouldn't worry that we'll have the same thing in LPP in Russia, that the products were sold, but sales didn't turn out so nicely.
That's a totally different case. This is abroad. Maybe there are problems with cash flows with Russia. I don't even want to examine that case right now. It's a pure case here. Basically, in a few weeks, two, three months, we should acquire the MKRI company. We hold control over them through the Oleś Rysz Sarkowicz law firm. The current shareholder would retain a 20% equity stake and works to succeed, and is counting that we'll buy him out in two to three years. That's quite straightforward. We have a business owner on the other side, and we're basically the sponsor.
One final question then, because there's been a bit of commotion in the last year. We have this entire history in Q2, that there were some differences. Expansion is quite broad-based. Are you not concerned? Of course, I respect you, Mr. Chairman, but you're alone. Are you capable of controlling all of that? This would suggest you could have some doubts gradually.
I can tell you, in the most recent period, we had a large number of offers to acquire nice companies, leaders on different markets, in footwear. There's a lot of that coming in. We made the decision not to acquire anything. We will continue to grow organically, because this is where we do the best. Organic growth, well, MKRI is a bit like organic growth. What did I buy? PLN 200 million in revenue, and then some competencies for zero, and with some losses.
Let's say it's going to cost PLN 100 million, the entire operation. That's going to be the all-in cost. I can tell you that next year, this is a business that will generate a return and more next year. We could discuss today whether or not just Gino Rossi. This was the worst acquisition. I spent more than PLN 100 million to acquire Gino Rossi. I had some 70 other stores, factory. Probably it cost me around PLN 100 million. Today, we're selling PLN 4 million in products from Gino Rossi, and we have PLN 50 more per unit. Basically, in a half year, I'm able to recover the money I spent on Gino Rossi because our magnitude is growing, thanks to Worldbox and others. Soon as we open 350,000 sq m or 300,000 sq m, we had said it would be 200,000, 250,000.
Please remember, if somebody's saying I'm not delivering, what are we talking about? We're talking about the 200,000 or 350,000. I'll deliver 300,000 sq m. That's three times more than in any other previous period. All the stores that we open are earning money immediately, and generating revenue, with the exception of Worldbox, where it doesn't have the right products there, inventory. Please be patient. Give us a few more months and you will see the fruit of our labor. Everything I've set up until now has been nearly delivered. It was very difficult for us to extract ourselves from that hole. Maybe there are too many jealous people. Maybe people don't understand how I was able to extract ourselves from that. 97% of our sales are in retail sales, not in wholesale sales. This is something that can be totally overlooked.
We've considered that wholesale business today to be basically a marginal thing. Some people are thinking that something's not quite right, but in fact, it's quite the opposite. Everything's in good order.
Are there any other questions? If you have any other questions, please ask.
Do you assume that this business in 2025, 2026, it should be profitable?
I'm talking about MKRI. I'm saying that by the end of the subsequent year, the beginning of the following year, we'll see where we are calendar-wise, but things should improve and basically we'll have a fire there. It'll be a driving force. I'm thinking it'll be 20% to be different. Maybe it'll be 17%, but who cares? If it's with VAT or without VAT, it doesn't really matter.
What we're saying is that we want to generate PLN 1 billion in revenue next year, and then a year later, we want to have PLN 1.5 billion, then we want to have PLN 2 billion. We're talking about that type of business. This is what we're striving to achieve. Have I done the right thing by acquiring a network as opposed to doing a greenfield operation? I think I've made a good decision here. I think I've made a good decision. I know worse acquisitions for a smaller scale business.
Thank you very much.
Thank you.
Any follow-up questions, please ask.
Were there any other things that we should give some explanations about?
I think we've given explanations about the key things. Maybe where questions were posed. This video conference call will be on our website, so everybody will have access. We're preparing a translation into English, and we'll also put up a transcription on the website so people have access to. We've given a lot of explanations. That it's not the case that debt's not collectible, but it's fully under control. It's under our control. This is not EBIT of PLN 268 million, but this is only maybe PLN 50 million-PLN 60 million
It's only done here when the goods are sold. We didn't want to enter into a brawl with the auditor. Our reputation is quite important, and we wanted to show that we've reached an arrangement with the auditor, but I have a little bit of dissatisfaction with this hit on our reputation because we're going to recover the entirety of the cash, and everything is going in line with the way we had planned for this to take place. I believe in the omni-channel approach very much so. We're the company that's opening the highest number of stores in this part of Europe, and this is being done successfully. There's no store whose opening would not be good. What should I wait for then? That's what I promised, is that I would actually grow this business. I'm actually not being paid for that.
I'm paying free of charge because you're familiar, of course, with the bet I've taken with the company.
I know.
Piotr has a facial expression suggesting that he's not convinced. Let's give him a few more weeks. Then you'll see the fruit of the labor. This report is just one pile of shit. None of these figures actually come together. I think this shit is basically falling away from us, and basically the share price will basically be released from this conundrum.
Any other questions? Please ask any questions.
Maybe one suggestion. I think this is what Piotr said. If we have this type of commotion, it's in your interest to make sure that the information output is as full as possible. Wholesale sales, what's happening with Worldbox, because people can surmise or fill in the blanks.
If you combine facts with a lack of facts, that's very easy to produce false outcomes. I didn't think that this would have such a major impact. I understand that these are commercial or trade secrets, but you have to think about transparency.
We really understand what's happening. We've been punished, and we'll try basically to show that it devotes that information. Wholesale sales up until now, especially recently, haven't been that substantial. We do have it. You don't have far away. You can visit our headquarters in basically the model room. Wholesale sales is quite tough to do. I mean, because you have to have samples and you have customers come in from around the world. Basically, wholesale is operating more quickly. They have to have samples. They go to customers, collect purchase orders.
You basically order footwear, you order it, and then it's delivered. It's four months, but in wholesale, you have to act a half a year in advance. That's not something that we really know how to do yet. We're trying to master that trade because this could also be a nice bit of money. We're understanding, we're learning how to make those shoes basically less expensively. The issue is the lead time. We have to take on some humility and then grapple with what our focus is. Do we want to have 100 HalfPrice stores? We're opening a very big store, I think it's going to be the best store in the network. We have a large number of offers from Spain and Italy. I think it's going to be the best, highest profitability store.
It's been working for a week, it's amongst the top four, while the rent rate is four times lower than we have on Marszałkowska Street. There's a lot of work for us to do. We have a lot of things on our plate. If we think about the square meters, I don't think we'll disappoint you because we see what's happening with the number of meters. We have to make sure that these stores are earning money at a high margin rate. The mistakes we made in Q2 will not be repeated, will not be replicated. Let's look at the entirety of this on the long term. People are thinking what happens in a quarter or within a month, on the 11th of September, people are asking what's happening in this quarter, even though it's the beginning of the quarter.
I look at everything in the long run. How many stores will we open? How big of a company will we be in three to four years from now?
We have one more question from Paweł.
I have a question. One of the arguments of EMG Research in terms of the softness of the business, you're saying that this hypothesis is not substantiated in reality, this is what Kinga said. Could you say something about the guidance that you've given? Are you upholding that or has something changed in terms of the guidance you've given?
Our four-year goals. It's very important to think about the two remaining weeks in October and September. Of course, we didn't have great weather in September, these two weeks now are very important. All of November. As I look at the weather, it's getting colder and colder.
There's no major temperature shifts. It was very good, it turned bad in October and November, basically we had to make some tweaks or changes to the sales. In Q4, the results were quite good. Now we're selling those shoes very normally. We have basically black and brown shoes, we're selling that successfully.
I'm not sure you're thinking about two or four in terms of the analysts. I'm thinking about the guidance for guidance, the two one guidance. In 3 weeks, we'll publish our results for Q3, we'll refer to that. I think that's going to be the proper form to think about that. Not to think just about Q3, Q4, especially the beginning of Q4, will also be important in terms of delivering the targets. We'll have the biggest stores open.
Q4 is going to be pretty important. We'll have fully stocked HalfPrice. For HalfPrice, December is really important because we have 40% of our profit generated in December. This is something that's critically important for HalfPrice, and we're starting to catch some really good margins in that HalfPrice business.
Okay, thank you very much for that.
Thank you. I don't think there are any other questions. If that's the case, maybe a few words of summary, Mr. Chairman.
I don't think they'll issue us another report, another fake report. I think things are going to do well. Of course, somebody did this just sort of sitting at their chair. Maybe artificial intelligence did this because it mixed up a variety of different cases.
Revenue got mixed up with the EBITDA, with margins, and square feet got mixed up with square meters. How many stores are we leasing and not warehouse space? It's very difficult to comment. I read the most important things. Honestly, I haven't read the entire report because when I saw the absurdities that were written here, we just decided to refer to the most important allegations. If somebody's saying that Reebok is a fake brand, we have done PLN 200 million in margin. We're talking in CCC channel. I'm not talking about other channels. Somebody's really basically erring in his ways. It's unclear who this is because there's no address, there's no identity of the person who's written this report. I hope and I continue to believe in my business.
I hope that I fully explained everything we want to do, why we're working together with MKRI. I think that now we now have the same knowledge base. If there are no questions, we would thank you very much for today's meetings. It took us a bit of time today. Thank you very much for dedicating that time.