Morning, everyone. Thank you very much for coming in to join our 2015 final results announcement. Today, as usual, we have our Chairman, Mr. Tim Parker, CEO, Mr. Ramesh Tainwala, and CFO, Mr. Kyle Gendreau with us. To begin, Mr. Parker will make a few opening remarks. Thank you.
Good. Thank you very much indeed, William, and welcome everyone. It's a great pleasure for us to announce another set of record results. This is the sixth year in a row, I think, that we have come up with these sorts of results. I suppose the most important point to note is that last year we faced some very significant currency headwinds. I've been used though, in my career, to the dollar going up and down. Last year was really the year when the dollar went up very significantly against, certainly the Eurozone, but many other currencies as well. What you'll see in our results is a pretty wide discrepancy between the actuals and the constant currency measures, so that our sales up to a record level of $2.43 billion, 3.5% actual. In constant currency terms, up 12%.
Of course, that represents a record which we've been able to continue over this six-year period, and especially since the flotation of double-digit growth each year. Our gross margin, percentage-wise, didn't move a great deal. Pretty much following sales, up 11.8% in constant currency. Our profits clipping $400 million for the first time. Again, the headline number 4.4%, but allowing for translation impacts, the actual increase was 12.6%, and I feel that's a very good result indeed, especially in a world where I think the consumer is becoming more fickle. I think the trading conditions around the globe are much harder to read at the moment, and there are clearly a lot of moving parts to distribution channels, principally driven by e-commerce, and also a lot of regional variations too, and some degree of lack of clarity over macroeconomic policy in the future.
These sorts of trends, I think, began in the second half of last year. I feel that the outturn for the year as a whole is extremely satisfactory. Adjusted net income following, in many respects, the move of our key profit measure, EBITDA. Of course, the difference between the 5%, 5.2% gain, in fact, in actual terms, four or five percentage points less than the constant currency growth. Very happy with what, again, looking at a fair measure, was another year of double-digit improvement. On the next slide, we've reiterated what we see as the model that makes up the strength of our business. First of all, I think we are operating in a very attractive sector. Whatever the macroeconomic trends, and China is a good example, whatever the economic trends generally, travel continues to be a very robust area of growth.
You can see that throughout the world. It's driven by, I think, first of all, people's inherent desire to travel. I think if you were to generalize, grossly generalize about consumers are definitely interested these days in experiences above simple purchases. People are getting out. We are seeing, I think, the growth of budget airlines worldwide. Obviously, the economics of airline travel are somewhat more attractive than they have been for some time. Travel is a good place to be in. You can see that most regions of the world recorded growth, which is close or above 10%. Asia up 13% in constant currency terms. I am rounding up here. North America up 7%, Europe up 18%, and LATAM up 8.6%. That in part, of course, is due to acquisitions, but the underlying organic growth is also very encouraging.
We are a multi-brand business. Of course, the big event post or that we have announced in the last few weeks has been to add another very substantial brand to our family or will be, hopefully, if this is agreed over the next six months. We do have two enormous brands in the company, Samsonite and American Tourister, and they are about to be joined by the world's premier premium luggage brand, Tumi. Samsonite last year up 5.7%, American Tourister up almost 17%. Another element of the strength of our business is that we rely on no single category of travel. We also are seeing excellent growth in business bags, up 16%, our casual business up 11%, and accessories up 35%. That is testimony, I think, to the broad base of our business. We are no longer simply a luggage suitcase business.
We are a very broadly based business across the travel goods sector. Last year was also another year of incredible growth in e-commerce. You can see our e-commerce business is now 8.5% of the total, grew very strongly. Our direct-to-consumer business, as we have been opening more stores, was up 22.5%. We not only acquired two significant retailers, but we also added a lot of our own stores. Finally, most important, we are the company that invests serious money into marketing, and last year was down slightly in percentage terms, but nevertheless, as often we remind people, we have just bought or are in the process of acquiring the second most important brand in the world, Tumi. Their sales are EUR 550 million, roughly.
We spend EUR 130 million in marketing across the world. That is way more than any other luggage brand or indeed any other brand in travel goods. That is the circle. That is why I think we have been able to deliver consistent results. We are very pleased with what we have done. The climate, I would say, is a little murky out there. It is a little hard to read how the future is likely to go. We are content, and I would now like to hand over to Ramesh to give you a little bit more color.
Yeah. Thank you, Tim. As Tim rightly said, considering all the macro noise in the background, we consider 2015 to be another excellent year for our performance. Asia grew by 11%, Europe 15.9%, Latin America also, excluding Brazil, where we are restructuring our business, also grew double digit. On this slide, you can have a look at it that the currency translation had an adverse impact of almost $198.2 million. As a result, the sales reported in US dollar value was lower than on a constant currency basis. Maybe Kyle can explain you better the slide number seven.
Yeah, sure. This slide just gives you some colors on where the currency pressures are. It's really just repeating what Ramesh, sorry, said. You can see the euro is obviously one of the biggest drivers, but actually currencies all over the world have seen pressures. You can go across Asia, you can go across Latin America, and we're seeing the noise. What we've also done on this page is showing you the translation impact of the EBITDA as well. If you look at our EBITDA of $401 million, that's negatively impacted by close to $30 million of translation pressure alone. As we look at underlying growth, our business grew around $280 million organically or through some acquisition. We've also grew the bottom line by that much more, an extra $30 million pre-currency translation.
What we really try to do here is just peel this back so you get a good sense for how currencies are impacting. We're a dollar reporter, as everybody knows. If we look at EBITDA margin first half and second half, we want to give you a color as everybody's looking at the numbers, and I've talked to a few people before we started. We have seen some of the pressures that Tim has talked about in the marketplace, we've painted a picture here for what our growths are first half to second half. We had a net sales growth, constant currency, first half of 16.6%. As we move to the back half of the year, it's around 8% growth.
That's really some of the pressures that we'll cover more as we get into the regions, largely with China and Hong Kong, that I think everybody's familiar with the pressures there. Along with the U.S., which is showing some pressures on the retail side around tourists not coming to the U.S. When we look at our gateway cities and our own retail stores, we see real pressures because of the strength of the dollar and tourists choosing other places to go. Might be part of the reason why we're seeing Europe actually up a bit, because it's become a very good place for people to travel. We're well-positioned around the globe, as you know, so we capture those consumers as they're moving around. We see that pressure in the second half in these few pockets which deliver that.
On the EBITDA margin side, we're up in the second half really for two reasons. One, our gross margin improved a bit. It has something to do with mix of the business, also we're starting to see a little bit of benefits of the commodity benefits that have started to work into our gross margin. We've also, in the second half, pulled down on our advertising just a bit to help offset the translation pressures on the profits on EBITDA. You'll see that our advertising spend in the second half was lower than what we had in the first half, that was just a conscious decision. As we've always said, we have that lever in our business, we pulled back on that just a bit to help offset some of the currency pressures in the second half.
The next slide, it's, I think, giving you some more color on Asia. Asia continues to deliver very strong growth, basically driven by China, Japan, Australia, and India. If you really go by country by country, we had exceptional results in Australia and Japan. Maybe part of it is also coming from more Chinese tourists flocking to these countries instead of showing up in Hong Kong. Overall, there have been a growth of 17.7% in direct-to-consumer channels, which is including brick-and-mortar retail and a very strong growth in the e-commerce. The direct-to-consumer e-commerce business grew by 48.5%. A net sales growth of 11.8% in the wholesale channel, with 73.2% growth in the net sales to e-retailers. When we sell to the e-retailers likes of Taobao and Jingdong, we book them as wholesale channel sales. Samsonite net sales grew by 9.6%.
Samsonite Red by 23.8%, as we have expanded Samsonite Red into few new markets. The total Samsonite brand sales grew by 7.7%. American Tourister have continued to grow by 9%. Some of the new acquired brands like High Sierra has grown by 28.4%, and we have also started to now extend the franchise of the newly acquired brand, Hartmann and Gregory, into Asia. The travel category grew by 10.4%, casual bag by 18%, driven mainly by Samsonite Red, Gregory and High Sierra, and business category grew by 16.7%. As we have spoken always in the past, that is one of our expressed desire to expand the business of non-travel category, to grow faster than our travel business, to make the business fundamentally more resilient. If I remind you and take you back in the history, eight years back, the non-travel component of our sales was almost insignificant.
From that to the total company's non-travel sale, which probably we'll cover in the subsequent slides, have moved up to around 31% of our total revenue. Definitely with acquisition of Tumi, which has a better franchise and more experience in the business category, we believe that will help us now to accelerate our objective of balancing our business between travel and non-travel to a 50/50% level, which we had expressed by 2020. The EBITDA margin in Asia have continued to be at 21.2%. There have been a small reduction in advertising, we have also been leveraging our relatively fixed costs. Part of it, the Asia also suffered some of the margin pressures because of the negative impact of the currency, including increased sales of B2B, which works at slightly lower margin. On the next slide.
In our Chinese business, net sales have grown by 13% in 2015, was largely driven by B2B growth. As we have spoken in 2014 and 2013 before that, the part of the B2B business had reduced during those periods, which have started to come back. There was a big comeback in the first half. There have been a strong growth of e-commerce, which is 92.3% growth over 2014 numbers. The first half, our sales have grown by 29.8%, which was largely driven by B2B sales. The second half, as a result, the growth have got moderated to around 2.6%. The main reason has been also partly mainly because of B2B, that B2B orders have not got repeated in second half. It is partly attributed to weaker consumer sentiments which are prevailing now in China. South Korea net sales grew by 4.5%.
That was also partially affected by the MERS outbreak. As a result, the second half net sales grew by 4.3%, which was down from 4.8% in the first half. India continued to grow strongly at about 12% in 2015. The first half was 13%, second half, 10.9%. There is a sharp net sales growth of 37.7% in Japan, partly attributed to full year impact of Gregory. Even excluding Gregory, net sales in Japan grew by 26.7%, as I spoke before. I am sure there has been an effect of an increased number of tourist arrivals in Japan, including the Chinese tourists. The combined markets of Hong Kong and Macau, the net sales growth of 3.1%, which was softened by same-store comp of 24.2% due to lower arrival of Chinese tourists, which has definitely had a negative impact on our profitability of our business in Hong Kong.
Australia, our net sales grew by 39.4%. It was partly driven by the addition of 6 new Rolling Luggage stores. Even excluding those Rolling Luggage stores, there was a very strong growth of 31.3%, which we can partly attribute to launch of American Tourister now in Australia, which grew by 88.3%, but also partly because of increased number of tourists arriving in Australia. In the next slide, we are adding a little bit more color to our business in China, because China is always a country which is of high interest for everybody. 2015, constant currency grew by 13%, driven by 92.3% increase in e-commerce. 49.5% increase in B2B business. B2B business have started to come back. I think if you look at it, second half of 2014, as we have spoken, if you look at our that 2014 numbers, already had started to come back.
There have been. That is why in the second half of 2014, there is an anniversary year for that. The net sales deceleration in 2015 was largely, as I have spoken before, is timing of the large B2B order was front-loaded in 2015, but back-loaded in 2014. Other channels had also weaker consumer sentiments and business migrating to online. I must tell you that online business has also an impact on the way we look at our net sales. When we book the sales at our department store, because the two channels which has suffered during 2015 or continued to suffer in 2015, one of the biggest channels have been the department stores. Which at one point of time in 2013, 2014, they made up for around 2/3 of our business. They have continued to lose share to other channels.
Department store, we tend to book our sales at the retail value because we run concessions there, and we book the margins which we give it to the department store on SG&A levels, which is on variable selling expenses. When we make the sale to online channels, we book our sales at the wholesale value net of the margins. For the same $100 sale that we'll now book it at department store, will show in my book at $100, but when I sell it on e-commerce channel, it will be booked at $70. That also has an impact as the e-commerce continues to grow at a faster clip and gaining market share from other channels, where we generally tend to book the sale on retail levels. That impact is also there in these numbers.
Samsonite net sales grew by 19.4%, driven by Samsonite Red sales of 58.3%, and all other Samsonite brands put together grew by 14.6%. American Tourister sale grew only by 1.9%. Here you can see this is the impact. Because online sales, bulk of the online sale is of the brand American Tourister. Our unit sales have increased just because we book the sales at the lower net sales value. You find that American Tourister sales have remained range-bound in 2015 versus 2014 because e-commerce picked up the sales at the cost of the department stores. High Sierra, though small numbers, it grew by 100%, Hartmann by 237%, they are still very, very small numbers at this stage. The travel category net sales grew by 5.9%, casual bag by 53.7%, and business by 23.5%.
Our this strategy to make the business grow more in the non-travel segment, continues to make very good progress even in China. The North American business, which is slide 12. We had a strong sales growth in wholesale, though we had challenges in our brick-and-mortar retail due to decreased tourism as a result of strengthening U.S. dollar. The net sales grew by 7.4%, excluding brand acquisitions. Net sales grow in wholesale channel was 3.3% increase in U.S., with the sell-through continuing to outpace the category in most key accounts, and 14.9% increase in Canada wholesale. Excluding brand acquisition, direct-to-consumer net sales were relatively flat year-over-year.
As a retail sales channel was down 1.9%, challenged by 6% decrease in same-store comp, mainly on lower foreign tourist arrival as a result of strong dollar, offset by 16 new stores and a full year impact of eight new stores in 2014. If you really peel down our numbers of if I add little more color on the comp sales in North America, we find two very, let us say, two very unique thing happening in our business. Number one, our full price sale, in North America also have continued, the comps have continued to grow. The comps have been around 7%-8% on the full price sales. Our full price stores in U.S. are very small portion of our total brick-and-mortar sales. The outlet sales have definitely been affected, because of the strong dollar.
If I exclude the Florida and the New York, these are the two gateway cities we can say, then the comp sales even in the outlet stores have been flat versus 2014 and 2015. When you look at the numbers in New York and in Florida, the numbers are -25% to -30% comp. There have been very, very serious drop in the number of walk-ins into our stores, and we attribute a lot of that is because of less tourists arriving, mainly Brazilians showing up less in Florida. E-commerce net sales increased by 14.7% and 18.3% including the acquisitions. Samsonite net sales grew by 3.4%, American Tourister by 18.3%, and other brands, High Sierra and Hartmann were down marginally 8.4% and 5.6%.
It was mainly because 2014, some of the promotional business were not repeated, in 2015 as a part of our strategy to reduce the reliance on promotional sales for these two brands. Full year impact from 2014 acquisition of Speck and Gregory, delivering an incremental sales of around $26 million and $8 million respectively. Travel, business, and casual, all the categories have grown. More particularly, travel grew by 5.2%, business by 3.9%, casual, because High Sierra we did not repeat some of the promotional business of 2014 have remained more or less flat versus 2014. Accessories grew by 38.6%, mainly because of increased sales from Speck. The adjusted EBITDA as a percentage of net sales was more or less flat, 15.3%. It grew in line with our sales growth. Europe was a shining star for 2015 for us.
Our business had a very strong growth of 17.7% on constant currency basis. Led by U.K., 41%, Germany 17%, Italy 18.9%. Even Russia, our net sales grew by around 9%, despite all the macroeconomic and geopolitical challenges that this continent have faced. Strong growth in direct-to-consumer sales. Retail up by 51%, partly driven by an 8.3% growth in the comp sales. 79 new net company-operated stores were opened in 2015, including 21 Rolling Luggage stores and 30 Chic Accent stores that we acquired. Part of it was because of the full year impact of 25 stores that we added in 2014. Direct-to-consumer e-commerce sales grew by 24.3%. Samsonite grew by 4%, American Tourister grew by 88%. As we have spoken before, we have been launching American Tourister aggressively in Europe after its success in Asia.
The other acquired brands are still very small, they have started to make their presence felt in Europe. Net sales in travel category grew by 10.9%. Business category grew by 39%, mainly driven by success of new products and a push towards growing the non-travel category. This is a push that you will see that we are doing it across every single region. The casual category grew by 26.6%, largely due to growth of High Sierra and Gregory. Accessories grew by 55.4%, mainly because of the two new retail chain that we acquired, which is Rolling Luggage and Chic Accent. Adjusted EBITDA margin remained more or less range bound. Margin dropped by 10 basis points. It was partly because the retail business that we have acquired during the integration phase have been margin dilutive, which has always been the case when we acquired a business.
In the beginning, they are margin dilutive. As we get them fully integrated to our business, which would be in the year 2016, the profitability will get up to the same level as our core business profitability. Europe is one region I would say that has done very good job in also protecting its profitability. Look at it, was one region which was most affected in terms of the currency pressures, because we mostly buy in dollar and we're selling in euros. Yet our teams have been able to do a good job. Also part of the credit goes to our brand power, which allows us to take a price increase without any impact or any negative impact on our revenue growth. Latin America. We continue to invest in retail expansion. We are also restructuring our team and organization there.
I would say that all those tasks have been accomplished in 2015 very successfully. Credit goes to Roberto, who is now heading our Latin America business. We now have a platform in Latin America to see some very robust growth going forward over next three to five years, and bring us closer to our goal of getting $500 million sales out of Latin America by 2020. Net sales in Brazil were down. Also there have been some challenges in the economic conditions. We also have been restructuring our business in Brazil. Excluding Brazil, the sales in this region grew by 14.9%. Retail sales grew by 18.5%, coming from 28 new stores, and full year impact of 11 stores which were opened in 2014. Same-store comp were up about 2.6%.
Samsonite net sales grew by 3%, with strong increases in Mexico, 10.8%, Colombia, 82%, but offset by Brazil, minus 16.4%. This is part of the restructuring which was happening in 2015 in Brazil. The other brands, these are brands which are more specific to Latin America. We have a backpack brand called Xtrem, which has continued to do extremely well. It grew by 21%. Saxoline is our entry price point luggage brand there, which grew by 12.9%. Secret is a handbag brand, which we operate in Latin America, grew by 14%. American Tourister largely remained flat as they're getting their strategy in terms of the products right in Latin America. Adjusted EBITDA as a percentage net sales were up by 70 basis points, which is mainly because of 270 basis points improvement in gross margin, largely due to inventory reductions in Brazil in 2014, not repeated in 2015.
Also, we slightly increased our advertising and marketing spend in this market by 70 basis points. In the next slide, we are covering the other market, some of the key markets growth on the constant currency basis. You see here that U.S. grew by 6.8%, China by 13%, Korea, which was affected partly by MERS, grew by 4.5%, India by 12%, Japan 37%. I'll not probably read all the slides because you have the sheet with you. Even some of the other emerging markets, Mexico grew by 17%. Russia, in spite of all the noise which have been there, had a strong growth of 9%. That did have a definite and a strong impact on the currency loss in Russia for almost about 16.6%. If you look at some of the other markets also, Turkey grew by 39%.
Brazil, as we said we have been doing restructuring our business, they grew. Philippines 31%, South Africa 29%. Malaysia is another market where we are restructuring our business. They grew by around 11%. There have been a strong growth in e-commerce and targeted retail expansion. The net sales growth on e-commerce was around 40.4%, driven by 30.8% growth in direct-to-consumer e-commerce, which is samsonite.com platform, and 48% growth in net sales to e-retailers which are included in our wholesale channel sales, likes of Amazon and Taobao and Jingdong. Net sales growth of 21.1% retail sales were driven by targeted retail expansion, mainly focused on airport locations and multi-brand retail concept, and a broader presence in Brazil.
This multi-brand retail concept is a concept that we have been rolling out across Europe. I must admit that acquisition of Tumi will go a long way in making this concept become more viable and more profitable going forward. In our Rolling Luggage store is the only place where we acquired the business. Tumi was already selling there. Tumi contributes to around 40%-50% of the sales of Rolling Luggage store. We already start to simulate that, if that additional sales will start picking up in our other non multi-brand store, that whole viability of our multi-brand store goes to next levels. Page 18 talks a little bit about some of the new acquisition that we have done. Rolling Luggage, as we have spoken before, we acquired for improving and enhancing our presence in the airport.
This has definitely helped us to improve our presence in European airports and also in Australia. Chic Accent was another retail chain that we had acquired. There are about 30 prime stores in Italy, multi-brand retail stores. I think this also is a part of our strategy to expand our multi-brand presence, our multi-brand store concept. Page 19. All brands delivering strong net sales growth. Look at Samsonite grew by 5.7%. I'm reading from the graph. American Tourister by 16.7%. Speck, since it was not a full year, it's not fair to make a comparison. All other brands also have grown very nicely. American Tourister is a brand which is now being driven more strongly in Europe. We are slowly also getting more acceleration out of American Tourister in North America. North America, American Tourister grew by 18%. Europe by 88.3%.
I believe that for the markets other than Asia, American Tourister will continue to be one of the biggest growth drivers for these markets. Likewise, other brands also have continued to do well. The brands acquired by us in 2014, I would say that each of the brands that we've been acquiring in the past is all part of our strategy to expand our business into a multi-brand, multi-category. As I said before, our non-travel contribution is now up to 31%. Lipault, which we acquired, it was largely only limited to Paris. In 2015, we started to expand its franchise into Asia. I do believe that this will be a very nice addition to our portfolio brand. Some of the products we have put on the display out there to really expand the franchise of our business into a women's segment.
Speck also is a brand where I would say that our team have done a very good job to bring up the profitability of this business to in line with our North America business. To remind you, when we acquired this business in 2013, this was the brand which was losing money. From that point to 2015 and 2016, now as I speak to you, the profitability of Speck is exactly in line with the profitability of our North American business. Gregory is a performance outdoor backpack brand, with very strong brand equity in two markets, mainly in Japan and also in U.S. It's off to a very strong start, and in 2016, it's our intention to expand the franchise of this brand in few other markets. We have just launched Gregory now in Korea also to very encouraging first consumer feedback. Our next slide, which is page 21.
Once again, we are giving you a flavor of different products that we sell in different parts of the world. Left-hand side is Samsonite in North America, Europe, Asia, and Latin America. Look at it, there are products which are somewhat differentiated in different regions. There are some common products as well. That is the strength of our decentralized business model, where we can design and develop product which optimizes the deliverance to the consumer through suitable products which could be somewhat differentiated between region to region or even country to country. The next slide, which is page 22. We are giving you a little bit of flavor of our Hartmann and High Sierra products. Slide 23. It basically talks about what I just covered. There is strong growth in all the product categories.
Travel 8.7%, business faster than other categories, which is 16.3%, casual 10.8%, accessories 35%, and others, which are mainly handbags and some other small things that we do in some pockets of our market, more particularly Latin America. The total non-travel category now contributes to around 31 .7%, which is up from 23.4% in 2012. Advertising spend was roughly flat on constant currency basis. As Kyle spoke to you before, we have partly used the advertising money to also navigate some of the currency pressures that we had on our profitability. I must say that even remaining flat on constant currency basis, we have been able to buy more media than we bought in 2014 because the media cost also went down by almost 30%.
Even at the flat level, when we look at our share of voice have increased by around 30% because average media cost went down in 2015 by around 30% compared to 2014. On the next slide is again to give you a flavor of different advertising campaign for different brands that we do in different countries. Once again, this is the strength of our decentralized business model, which allows us to have advertising campaigns which are individually suited for different markets. Kyle can take you through some of the financial highlights of the business.
Some of this is repeat, but they're good to repeat. We talked about strong constant currency growth. As we look at our business, we grew around $280 million in sales in constant currency or close to 12%, offset by roughly $200 million of currency noise. I think that's an important piece that you should take away from today. Same for EBITDA. If you look at EBITDA and we peel out just the translation piece of currency, our EBITDA growth is around 12.6%, or $433 million of EBITDA. Strong operating cash flow, which we didn't cover yet, and something that's a pillar, particularly with the Tumi acquisition coming in, and we've always talked about the cash generation of this business, and we had a very strong cash generation, close to $260 million, which was up around 13% from $230 million last year.
We're very comfortable and happy with the cash generation of the business. We have very strong balance sheet with a net cash position of $117 million and a revolving facility with availability of $450 million. Obviously, that'll get reset with the financing for Tumi, but we'll be putting back a $500 million revolver facility as part of that transaction, which to me is just good liquidity management for the business. Our net working capital, we've always talked about a target of around 14%. We continue to do better, and this year, we actually brought this down even further, so we're just shy of 12% working capital. I'll show you the details in a few pages.
Our CapEx has stayed fairly consistent in line with what we've been guiding. We spent around $68 million on CapEx, largely around the targeted retail expansion that we've talked about, and I'll give you some color in a bit. Also continuing to invest in innovation and product development, particularly in Europe and a bit in Asia as well. Excluding FX gains, our adjusted EBITDA margins-- our adjusted net income as a percentage increased by around 30 basis points. If I exclude FX gains, which is really around some translation of balance sheet items that flow through our net income, along with stock-based compensation, effectively non-cash, our net income grew by 30 basis points, really driven against improvements in our adjusted EBITDA margin. Also our effective tax rate has come down from 27.3% last year to 25.4%.
We've often said our tax rate will run in this 25%-26% range. Last year was slightly higher than normal because we were cleaning up some things in the U.S., and this rate at 25.4% is where we generally expect this to continue. As we model our business, we're assuming a tax rate of around 25% on a go-forward basis. The board yesterday approved a cash distribution to shareholders of $93 million. That's up about 6% in line with our increase in reported earnings and staying true to our dividend policy that we set a few years ago. From a balance sheet perspective, I've largely covered this, but if I walk you through kind of the net cash generation, we increased cash by $44 million last year to this year, driven by operating cash flow of $259 million.
We did a few small acquisitions, I would call them kind of distribution acquisitions that Ramesh covered. Rolling Luggage, which is an airport retail chain, $23 million. We bought back the minority share of our Russian JV this past year around $16 million. We bought Chic Accent in Italy for around $7 million. We had some small acquisition dollars out. We had CapEx of $68 million and last year's cash distribution of $88 million. Again, gives me a lot of comfort as we move into the Tumi acquisition, where we'll actually have some debt that we're servicing. Strong working capital, covered on the next page. Again, the revolving facility, very available to us. We improved the working capital year-over-year. Last year, we were 12.7. This year, 11.8.
Really driven by a few things. One, our inventory days are slightly up. This is largely due to the earlier Chinese New Year. We often buy in ahead of that, no surprise our days creeped up just a bit. Our trade receivable has come down just a bit by one day. That's really around mix of business changing. As we continue to drive some expansion in retail and largely e-commerce, you'll expect these AR days probably to creep down over time as we move the retail mix of the business up slightly. We're seeing what we should see there. Our trade payable days are up from 100 days to 109 days, largely off the back of this vendor financing program that we started a few years ago as we moved most of our suppliers to 105-day terms.
Using the vendor financing facility, we help bridge for those vendors. That's been very successful. We're quite happy with how well we're managing working capital. From a CapEx perspective, a bit of the same story from last year to this year. Targeted retail expansion. You can see in Asia, where we spent the most, around $13 million. Europe is next at around $10 million and a bit less in the U.S., as you'd expect, as that market's a bit more mature for us. Now Latin America is starting to show up with a little bit more money than we've had in the past. This is really around laying the foundations in markets like Brazil, where we're starting to spend a bit more on retail expansion there. Again, we're investing in product development and innovation.
We finished the facilities that we talked about a year ago in Hungary. We had some effect of that coming into this year. We've also started to invest in our facility in China. A new warehouse and office facility in China. That starts to show up in 2015, and you'll see that carry into 2016 as well. I expect our CapEx to be something similar to this for next year as well. Back to you.
The engines of future growth. As Tim said, it is true that the market consumer sentiments remain somewhat challenged in a few of the markets. Underlying growth in the travel industry is still expected to be around 5%-6% over the next five years. We look at our business. We are not strategizing our business for the quarter to quarter or for one particular year. We look at our business that we are strategizing our business over five-year blocks. What we achieved over the last five years and what are we looking at our business for next five years, is that is how we look at our business.
We feel that the strategy that we rolled out over the last five years, which was primarily of transforming our business, I'm just repeating my words, from a single brand, single category business, and largely a single channel because it was largely a wholesale business, to a multi-brand, multi-category, and multi-channel business. That has worked very well for us to allow us to deliver strong double-digit growth over the last five years, both on the sales as well as in the profit, and we believe that's a task which is not finished as yet. Whatever initiatives that we have taken over the last couple of years in trying to acquire a few of the brands was all in the direction of trying to implement and reinforce this core strategy.
If you have seen that our non-travel category from very insignificant numbers over five years have gone up to 31%, and the few acquisitions that we have done over the last couple of years, more particularly Lipault. Lipault, when we acquired, was a couple of million EUR business. We were never getting excited because we acquired the business for its couple of million EUR sales. We were looking at it, what can it do to our business? Women category today globally is expected to be the largest growing category, and that is one category where there are brands which are operating at the fashion end of the segment, like your Prada, Gucci, and things like that. There are brands which are at the very, very low end.
This whole mid-market, which are for serious business travel, which are not very expensive, but were not very cheap. From price bracket of around $100-$300. That's a price segment that we want to go after, both with the travel products, luggage product, which are designed more specifically for women in mind, but also the non-travel products. Lipault was part of that strategy. Look at our casual bag segment. High Sierra is the number one back-to-school brand in North America. Xtrem, which is our brand in Chile, is by far the number one backpack brand in Chile. In Chile alone, we do around $30 million worth of sales of backpack.
Leaving these two countries, our backpack contribution to our sale is still very, very small. Our own estimate tells us that a backpack business globally is estimated to be as big as a travel luggage segment. Some of the brands that we've acquired recently, more particularly Gregory and High Sierra, are our platform together with Samsonite Red, which we launch on our own. These are the three key brands which will allow us to become a more serious player in this casual backpack business. Similarly, when you look at the multi-brand strategy is also about acquiring different price points. We want to be an active player in the price point. As we have always reminded ourselves, and once again I remind myself saying that the luggage industry is today estimated to be around $25 billion business. We have $2.5 billion of sales, approximately.
That makes up our market share to be around 10%. There's another 90% of the business which is out there for us to go. I'm always telling our own team and ourselves, including myself, that we don't have to wait necessarily for the market to grow. Our business has to be based upon how do we gain market share. When you look at our European sales, if it has grown by 18%, it is not that the European luggage market grew by 18%. It is just that in the past of the entire luggage market, I'm talking about only travel luggage market, we were only operating 20% of the entire luggage market.
The luggage market, if we start dividing it in terms of the price point, 50% of the luggage market sits at the entry price point, 20% of the luggage market sits at the mid segment, another 20% sits at the premium end of the market, which is $300 plus segment, where we have a small play now, and there is another 5%-10% of market sits at the super premium segment, which is $1,000 plus. We don't intend to get into that segment. What are we trying to do in Europe is we are becoming a more active player with American Tourister expanding the field where we want to have a play.
This is the strategy which gives us the confidence that in spite of whatever macro noise is in the market, we should still be able to continue to deliver double-digit growth over the next five years. We're not going away from that. It's still that our belief in that still is very much intact because we need to continue to grow. The industry is expected to grow around 4%, 5%, 6% kind of a number. We have continued to deliver faster than the industry growth. I see no reason implementing the strategy that we have done over the last five years, continuing on the same strategy, trying to gain more share, becoming a more active player in the price segments where our market share is smaller.
Similarly, getting a bigger share of the non-travel adjoining spaces, where again, our market share is lower, we can continue to deliver double-digit growth over the next five years. It is true that 2016 could be somewhat more challenged because still there are currency noises in the background. Yeah. There are markets where we still feel that there are some currency noises are there. Latin America is challenged. As compared to last year, we see some of the Asian currencies are still under pressure. The euro also is anybody's guess what will happen to that. If I factor everything around that, if we end up delivering, let's say, a single-digit growth next year or 2016, this year, I won't be disappointed because I cannot today having a visibility into what will happen to the rest of the year.
If somebody asks me that, what do we expect to happen in 2016, more particularly, we would say that mid to high single is what we are looking at it. If we are getting benefited by some positive tailwinds, maybe we will get into the double digit. If we encounter some stronger headwinds, maybe instead of a high single digit, we may slip down into a middle single digit. If you factor it against the macro picture, I would say that that still would be a very good result. The other points, more or less I've covered, that we are continuing to tactfully deploy our multi-brand strategy to operate a broader price segment. I'm just reading it now from the slides. Increase the portion of our net sale from our direct-to-consumer channels, more particularly e-commerce, because e-commerce is a channel which is continuing to grow.
We'll also continue to work on targeted retail presence. We're now more confident of our multi-brand strategy, than I would have said that I was before. If you remember last time when we met, I told that multi-brand strategy is working very well in Asia, but we want to be cautious about our multi-brand strategy in North America and Europe because we were feeling that we were missing a very credible presence in the business segment in Europe and North America. Also, we were missing out on that premium price segment, which can easily deliver 20%-25% of the sales of a multi-brand. With the acquisition of Tumi, that whole multi-brand strategy could be rolled out with more confidence even in other parts of the world. E-commerce. Our multi-brand strategy again helps us to engage e-commerce more effectively without having a detrimental impact on our brick-and-mortar business.
On side by side to protect our brick-and-mortar business, we are also implementing omnichannel strategy. We are also starting to think about right-sizing our retail stores, especially in North America. Especially the factory outlet business that we have it. Today, our size of stores, I believe, can be right sized to the Asian sizes. In Asia, our average size of our store is about 80 to 90 sq m, 800,000 sq ft, 900,000 sq ft, where our stores in North America tend to be in the region of around 200+ sq m. I feel with implementation of omnichannel, we can offer a larger range without necessarily having to have a larger retail footprint. When you cut down the size of the store or right-size the stores, your cost in terms of the rent and some of the other overheads will also come down.
I do believe that e-commerce and omnichannel is here to stay. We, last year, the contribution was around 8.8% of our total revenue.
I see no reason by 2020. I rather would be surprised if e-commerce is not contributing to a minimum quarter of our sales or even in some country, going up to about a third of our sales. Already in Korea and China, e-commerce starts to contribute to around 14%, 15% of our sales. There are some markets where e-commerce is still taking some time. We continue to invest behind our brands, more particularly the newly acquired brands like Gregory and Lipault, and I think in Hong Kong also, we are preparing to launch a major campaign with Lipault because we do feel that this is one brand which clearly offers us an opportunity to deliver a couple of hundred million dollars in next five, seven years' time. We will continue to invest behind our brands and more particularly focused at the non-travel segment.
Even if you have seen some of the ads that we are doing with Samsonite brand now also. We are pushing the non-travel category. We are advertising non-travel products, more particularly backpacks and business bags on our Samsonite brand rather than the travel bags because we feel our travel segment, we already are market leaders in many price segments, but we want people to associate our flagship brand, Samsonite, not only limited to travel but also to non-travel. Thank you.
Great. Thank you very much, Ramesh. Now we move on to the Q&A section. Starting with Josh in the front.
Hi. Good morning. Couple questions. Two on China and the U.S. separately. If I look at the China business growth, Samsonite brand is actually up double digits. I would imagine Samsonite brand is also sold mainly in the department stores. How we reconcile the fact that Samsonite brand is doing very well, but you talk about department store sales being weak? It seems that the weakness is actually more in American Tourister, which is less dependent on the department stores. Similarly, for the U.S. business, the wholesale channel into the full-price seems to be doing okay. The outlet is weaker. I would think that the gateway cities, the tourists would be impacting more the full-price. But again, there seems to be some of that difference there in the numbers. These are the two country-level questions I have.
Okay. The easy answers, Samsonite in China, why that's double digit, whereas American Tourister is flat. Samsonite double-digit growth is coming from two things. One is because of B2B, because the part of the B2B business, as we have spoken before, was the airline crew business. That is a part of the business which have started to come back to us again, which was completely blocked as of 2013. One reason is that Samsonite sales starts to come back. The second is that department store deals with both Samsonite as well as American Tourister. If you really look at the sales which department store haven't lost that much to e-commerce is Samsonite. The reason being because Samsonite is mostly not so abundantly available on e-commerce. E-commerce is still largely a promotional and value-driven business.
The e-commerce channels can more easily grab the sales out of the department store of American Tourister, but it's a promotional sales. That is the two reason why the e-commerce have been able to pick up the sales from the department store more from the e-commerce. I must say that if you look at department store for the breakdown of the sales by brand, we'll see that department store in 2015 have remained flat versus 2014 in case of Samsonite. But they have lost, they're almost -15%, -16% for American Tourister brand because that's one reason for China piece. When you look at the gateway cities also, on the gateway cities, whether it's Chinese or Brazilian, they go to factory outlets. They don't go to the full-price stores.
They already have an app which shows them which place to go and where the cheapest product to buy. The full-price sales, and now we have some visibility into Tumi's business, for example. Look at their business also, their like-for-like also on the full-price is still very robust. Even when I look at Hong Kong, which is another very peculiar example, when I look at our What is that place? Citygate? The factory outlet? Near the airport. Yeah. It's almost fall off the cliff. When you look at the full-price sale, it's not so bad, especially for Tumi, it's not so bad. The reason being because it's bought by people like you. It's still as many bankers and as many meetings have been held in China.
Factory outlet business are getting more affected to e-commerce as well as to the tourist arrivals. In Japan also, we see that there's a very strong growth in the factory outlet business. When tourists go to another country to shop, they actually want to do bargain hunting.
I'll add to China that Samsonite Red, which we started to launch in China, is doing very, very well. It's up % and the business probably have done very, very well in China too, and those feed into that Samsonite brand. Those adjacent categories are growing faster under the Samsonite brand.
Yeah. Thanks. Just two questions for Kyle. The translation impact on top line, I think we all get that.
Yep.
How exactly calculate the translation impact to the EBITDA number?
Yeah. It's probably harder for you to do because there's a lot of moving pieces within it. What we're doing is taking the same rate as last year and applying it through our consolidation model. Right? You're not going to get all the pieces because not everything's going to translate one for one, just like revenue. Actually, if you look at the margin impact-
Yeah
If you take a margin impact, it's not that different. Right? If you think about $200 million translating into a little over $30 million of EBITDA, it's about the same margin as our core business. For you to do it and get to the number I'm getting to will be very difficult, because within things like COGS, it's not all translating one for one.
You take into account the gross margin impact?
No, no. This is just translation.
You're assuming-
Just translation.
Yeah. We're not-
You're assuming-
I'm very careful to say it's translation. I'm not assuming that.
Gross margin
my gross margin is different. Right. It's just.
The SG&A.
Yeah, exactly.
You are not assuming.
Yeah, exactly.
The reality could actually be a bit bigger.
It works very close to the same margin as our business, right? I'd have to, if you really wanted to play numbers, we could do that.
If you look at marginal translation, it's about the same.
Right.
You can't just kind of one for one go to EBITDA and translate.
Yeah
Because there are a few lines that don't translate the same.
The currency pressures on the margin, we have been largely able to.
Yeah
navigate it to the consumer. Two ways. One, as you know, Europe, which was a largely affected market, we have the rolling hedging policy. The translation does not necessarily impact the margin right away. Secondly, there was also an advantage of commodity prices moving slightly backward, which also allowed you to naturally manage and navigate the currency pressures. Quite honestly, when you look at our margins by regions, they have remained more or less the same for the same brand across all the regions. Translation effect on the margin. If there was no margin pressure, you could have seen. If there was no currency pressures, you could have seen a slight improvement in our gross margin. I'm always asked, I'm just preemptively replying on that what happened to the commodity prices?
The commodity prices went backwards so much, we should have seen something coming in your books, for example, North America. Where there's no currency pressures, still our margin will remain more or less in the same zone as it was in 2014. There is no benefit which we see of the commodity prices. The long and short of the answer is that the raw materials component in our COGS is about 20% of the total cost of goods. Now, commodity prices, we have done a recent calculation, has on an average, have gone backward by about 30%. Because it's not direct related to only polymers, it's also to do with the demand supply. Like polycarbonate prices have gone down by only 15%. Because if there are less supply, they can quickly cut down the capacity and not allow the prices to go down that much.
Approximately 30% of the commodity prices have gone backward, and 20% is the commodity component to that. 6% should have been theoretically a margin improvement. In North America, what we are always very conscious of the way it is in the past also, that these benefits are not only accruing to us but to everybody. We have never wanted to materially alter the price-value equation of our product. Our buyers also are the big box retailers. They are likes of Macy's and Walmarts. They read the newspaper and watch the television even more than us. We tend to navigate our gross margin at the same level whenever, both ways, when the margin pressure is there or when we have the margin advantage, by adding or deleting bells and whistles, I will say.
In the U.S., our product will certainly find that the new products are coming out with maybe an additional shoe bag or a toilet kit. We have thrown in a few bells in that to bring up the value of the product which we are delivering it. Same way in some countries where there have been a huge margin pressure because the currency has moved even more backward. Yeah. Either we take a price increase-
Okay
Sometimes we also strip out some of the bells and whistles. This is how we navigate it. This is how you have to see our gross margin. Coming back on this translation effect. If we really take this $200 million sales effect that we have it, and we work on an average, different regions are working at different places. Let's say Europe and Asia, where the margin pressure was the most, their weighted average EBITDA would be around 18% or so.
A little less. Yeah.
17%-18%. That multiplied by the sales effect that you have is what is the EBITDA effect you have, roughly. Because EBITDA of Europe and Asia, yeah, and this currency effect, which you have it, the EBITDA difference is exactly coming to that level. That's all.
Okay. Thank you.
In front.
Hi, Ramesh, regarding the guidance in terms of the outlook of a mid-point, like high single-digit top-line growth. How does it look like in terms of by markets? Which one will be better? What are the markets, in particular like maybe China and U.S.? How do you look at which of the market that will be very different from last year in terms of a trend? That's my first question. The second question is on the GP margin. GP margin actually in the second half improved to around 53%, possibly because of the ASP increase and all that. This year, we will see a full-year impact, and on top of that, from what you just answered, should we be expecting that will stay similar or what is our outlook for that? The third one is on the A&P expenses. Could you give us some guidance?
Last year, we had a cut down in terms of advertising dollar to sales in the second half. By which brands or which market that you have some adjustment, and will that be recovered afterwards? Thank you.
Okay. The outlook for 2016, as I said, that I'm far more confident about giving you an outlook for five-year block, rather than giving you an outlook for the year. Because lot of pieces which are moving within 2016. I can roughly guide you to say that, we see a continuing strong growth in Europe. These are all on constant currency. As of now, my outlook is that Europe and Latin America, these are the two markets where we should be able to deliver mid-teens kind of a growth on a constant currency basis. Which is continuing on the momentum which we had gained in 2015 to continue into 2016, and Latin America now coming back because of our change strategy, which we have implemented in Latin America, more particularly in Brazil, kicking in.
These are the two markets where we can say, mid-teens is a kind of a number we are looking at it today, if there is no change in the macro situation. North America is a business which still continues to face, I would say, pressures on the retail comp. I must say that if you really look at your retail comp of North America last year, the first half, it was negative minus two, minus three kind of a number. In the second half, it went up to almost -10, -12. The first half, at least in the first quarter, we still see a negative comps. Of course, it has come down. Yeah. Every next month it is coming down a little bit and all that. Maybe the second half could become somewhat better.
Today, I would look at it, if I blend everything together and considering the macro situation remains where it is, Americans don't end up electing Trump or somebody like that. Yes. I don't know whom they're gonna elect it. The numbers will be more like, we will grow slightly faster than the market. Market expected to grow around 2%, 3% kind of a number. Mid-single digit is what we should expect, which again, is a continuation of what we have done in 2015. Asia is a business where I would look at it, there are different parts of Asia which are delivering different kind of a numbers. Some of them will continue to deliver numbers very similar to what they have done in last year, which is market like Australia, Japan. They still continue to see the momentum in the business.
Last year, they grew by around 30%-35%. I would say that, they can definitely deliver mid to high teens kind of a number, into 2016 because they still have the momentum, both because of continual strong growth in the tourist arrival numbers in these markets. Also, we are able to expand our distribution in both these markets. Markets like Korea, India, I'm not talking about only the bigger markets because there are four big markets for us in Asia. Korea will be little bit like mid-single digits because there's still always, there are some weeks where the North Koreans are doing some crazy things, and suddenly you start to see that there are less traffic in your store. I mean, sometime I'm amazed why all South Koreans are so sensitive to what happens in North Korea.
Maybe they reduce the sensitivity, probably that guy will stop behaving so crazily, yeah. That's the reality. I think at this stage, mid-single digit is what we can look at it in our Korean business. India, we should be able to get to high single digit, and if everything helps, maybe slip into a double digit kind of a growth. China and Hong Kong. Hong Kong, I am asking everybody, tell me what's happening in Hong Kong. 2015, we saw a serious deceleration in the growth. We were still on a positive, versus 2014. The first quarter in Hong Kong looks to be very challenged. I'm still not able to understand that what's happening in Hong Kong. I mean, I personally started to visit Hong Kong store. I've not visited our store for last one year.
Since last two weeks, I'm visiting all the store to try to find out that what's really happening. I was asking Josh, "Tell me what's happening in Hong Kong to other brands." Hong Kong is a little bit of a challenge. It's very difficult to make an assessment that which way Hong Kong will go, though it's not a huge part of our business, but it's a meaningful part of our business, and we combine Hong Kong generally with our Chinese business when we evaluate our own performance there. China, our business, the core business of China, still remains strong. Yeah. The change in the channel dynamics still continues. That means e-commerce continue to grow at the cost of departmental stores and at cost of now shopping malls as well.
In the past, only the departmental stores were losing customers to the e-commerce, but now we start to see that even the shopping malls where we operate or our franchises are operating the stores, they start to lose the sales to e-commerce. As I tried to explain to you before, when e-commerce sales grow, for the same sales that we lose in departmental store, even if I get exactly the same growth in e-commerce in that dollar value, but it looked to be 30% less. We will book it that way, because we'll book wholesale in e-commerce, whereas we will lose the sales on the retail value. If I blend everything together, our outlook for China is there for 2016. If everything is where it is today, we should be able to see a high single digit kind of a growth in China.
If there is some help at the macro level, maybe we'll get to double digit. Today, economic conditions where they are, and knowing that the gain of e-commerce will get factored by 30%, the outlook for the business is high single digits. A&P spend. Last year, we do shuffle our A&P spend by brand and by regions. We have been spending a slightly bigger part of our money, our A&P budget, on Samsonite in the non-travel segment. The Samsonite business have been pushed a little bit harder in 2015, and same we will intend to do it in 2016. Same way, we have also increased our spend on American Tourister, more particularly in Europe, and we will continue to invest more behind American Tourister in more particularly in Europe.
We're also increasing our A&P spend in some of the new markets like Latin America, like Brazil, Colombia, Mexico, where we are now restructuring our business. We're also investing slightly higher amount of money with new brands, more particularly Lipault. Because we do see that Lipault sits at that very sweet price point, sweet spot in the market in terms of the price segment, where it's a mid segment of the market, which still continues to be very buoyant. We just do move the pieces here and there. I say that at this stage, our outlook for A&P spend is that it will be more or less in the same zone as it was in the last year. Yeah. As a percentage.
Percentage, yeah.
I mean, we have an express desire. If you ask me the outlook for our business for next five year is that we would like our A&P spend to move up. We are not able to That can only be done during a period when the market is generally more buoyant, and it has less noise on the macro level. Assuming that the macro noise which is there will continue, you can see our A&P spend to be at the same percentage levels as it was in 2015.
Our gross profit will be about the same as what we've done this year. Even though second half this year looks a bit higher, we're also coming off of very good currency hedges for 2015. As we've hedged forward into 2016, those hedges are at rates that are more in line with what we've seen. We had some positive benefits there. When we look at our gross profit, it'll be about what we did for the full year this year for 2016, 52.5%, maybe a shade better as we get some of the commodity benefits carrying through. I mean, you shouldn't see that gross margin moving much from that.
As we've always said, we don't artificially move the margins up. It could be just a timing issue of some navigation, which happens in some cases, but our margin by brand and by region, more particularly, remains more or less in the same zone. Sometimes each region's contribution could be slightly different, and that gets reflected in few percentage point here and there.
Okay. Before we take more questions from the floor, any questions from online?
Yes. There's a question from Kevin Kung, Water Island Capital. With regards to the Tumi acquisition, can you provide any thoughts on cost savings you expect to potentially realize?
We cannot give you a guidance in terms of the numbers. What we can only say that as we have seen this business in the past, and as I spoken last time also, we have been trying to see this business for the last 15 years. Now we have a better visibility into the business. Our understanding of the business is becoming better and better, and we see that the business is very much similar to our business. It's almost exactly same as our business. It's just that they operate at a different price point, and it has a different margin. To the extent that every single vendor which they have are the vendors that we deal with. There are no new suppliers.
On the other end, if you look at it, that every single customer that they have, I mean, every single channel partner that they have, whether they are the department store like Macy's or Takashimaya or Hyundai or Bloomie's, we also deal with them. They deal with the same old developers. If you come to IFC store, there's Samsonite, and next door there is a Tumi store. Which gives us the confidence that over a period of time, as we start to integrate the business, there should be some very serious cost synergies. I would also like to warn that it's a very well-run, profitable business. Our first task would be to make sure that this business continues to deliver the numbers which it was delivering in the past.
Integration benefits in terms of the cost synergies would be seen over a period of next three to five years. It may not start kicking in right away.
Okay. In front, Marianne.
Thank you. I think this question is probably more for Tim. Just wondering on the Tumi acquisition, could you actually share a bit more color on your role? I know you definitely have a very strong background in restructuring, so if you can make some comments, that'd be great. Thank you.
Oh, all right. I don't want to disappoint on that front, but because I've got a very effective team who will be handling the restructuring, and my role today is really to be more of the admiral than the captain of the ship. The captain here, I think, has got a very, very good plan of how to improve efficiencies. I think all we can say about Tumi over the next few years is just to look at comparable acquisitions and look at the sort of savings as a percentage of turnover that are achieved. I don't see why this particular transaction shouldn't be different from many others in the consumer goods space.
Okay. Thank you. Rob in the back.
Hi. Can you share with us? You mentioned you right-sized the U.S. retail stores. Does it also include the store network? Are you planning to right-size the total number of stores in the U.S.?
I would say that our retail stores in the U.S., they continue to be very profitable. We have very few stores, maybe one, two, or something like that, which are not profitable. It's just that the profitability has been a little bit challenged, as compared to what it was the years before when you have positive comps. We have no plans to close any stores. Right-sizing is more because this whole, let's say, dynamics of omnichannel will continue to get stronger. I feel that the consumer is now clicking, picking, clicking. It's happening both ways. We can offer the consumer a wider choice without necessarily having to carry those inventory at our point of sale. This right-sizing is more about following the trends in the market and also to help further improve the profitability of the stores.
Great. Thank you, Ramesh. Let's see. We'll take a couple more questions. We'll start with Peter here in front and then moving on to Shen on our left.
Yeah. Hi, thanks for taking my question. Couple of things. Firstly, on American Tourister, you mentioned a decent result in the U.S. there. I was wondering if you could give us some reason for the background, because in the past few years, American Tourister growth has been more of a European story. Secondly, on Speck. You've done a good job in moving up the margins. Just wondering what you see in terms of top-line growth, whether you're thinking of accelerating that side in the coming few years. Thirdly, on just China B2B. You saw a falloff in B2B in second half of 2015. Whether you think that's normalizing going forward, i.e. worse is over or any kind of views on that in the coming quarters. Many thanks.
Okay. The American Tourister growth in U.S. last year was around 18%. I wouldn't say that we are having a new strategy that we are implementing in the U.S., that additional growth is also coming in from some of the channels that we deal with American Tourister, which is more particularly likes of Amazon, Walmart, TJ Maxx. Some of these value retailers have performed better than in 2015 versus 2014. You get partial benefit out of that. The second is, we also now have a very active licensing arrangement with Disney. We have this whole range of Disney by American Tourister which also has helped to improve the performance of American Tourister brand in North America. Coming to Speck, I would say that definitely our team there has done an incredible job in trying to improve the profitability of the business.
The profitability of Speck, as I said before, is exactly in line with our profitability of our North American business, which is mid-teens kind of a number. On terms of the top line, I must say that the Speck business on the top line is very directly related with the new introduction, or the success of the new introduction by the mobile phone providers. In 2015, it has not been a great year in terms of new phones. Whether it was from Apple or from Samsung, these are the two big players in that segment. As a result, the sales have been more or less range bound. If you ask me for the outlook of 2016, you know more about the outlook for the phones. I think we will basically be in line with those things.
At this stage, our outlook for Speck, because I know that there are no big major launches until autumn/winter 2016, which have been planned by Apple. The result of that would be that our sales of Speck would be more or less range bound. It will grow by 4%, 5% kind of a number, not anything material. Speck's expansion into other markets outside of North America, Speck still continues to be largely a North American business for us. We are still working on our strategy. We may end up doing some test marketing of Speck in China in second half of this year. It will not move the needle that much more. We still need more time to understand this market, because the whole dynamics in terms of distribution and channels and things like that are very different.
I must also say that our teams have been also busy with so many other initiatives they are working on. In our decentralized model, we do not push down from the top that everybody must get out and start launching the brand. Our North American team was also not able to provide much support to other regions to start launching Speck in the other regions, because they were also focused on improving first the profitability of the brand. I said they have done a great job. H16 also would be a continuation of improving the profitability for Speck. What you will see that our sales of Speck will be more or less range bound, maybe 4% or 5% kind of a growth, which is in line with what is going to happen in North America. Profitability will get further improved compared to 2015.
Maybe on 2016, 2017, we will start exploring the possibility of bringing Speck out of North America in other regions on a more serious basis. China, the B2B. I did not say the B2B fell off in 2015. What I was trying to say is, 2014 second half, the B2B already started to come back. The first half, in 2014, there was no B2B. In 2014 second half, we already started to get it, there was an anniversary year in 2015 for the second half. If you see the growth number, we had a huge growth number in 2015 first half because there was no 2014 B2B first half, where there was already a B2B in second half of 2014. B2B business is a little bit of a lumpy business, I would say.
Yeah. It is very difficult to predict. Does it come uniformly across all the quarters? No. There is some quarter that will be big. I already know the first quarter because we have the visibility into the first quarter. There practically, very little B2B in the first quarter. I also know that there is going to be a strong B2B in the second quarter. We only have the visibility up to a quarter because we get the order for maybe a couple of months in advance. It is little bit like that. I think, today also it is not fully recovered in China. As I said in the past also, there are three component of majorly the B2B. There is one is airlines, they are back. Yeah. Because that is more like a uniform. The second is the banks running a loyalty program for their customers, their VIP customers.
You accrue the points, you can encash the points with some travel products, and there are other products also in that. There's a third, which the state-owned enterprises were buying for their employees. Yeah. That hasn't come back. That used to be the biggest part of the B2B business until 2013. That hasn't still come back. The banks have started to come back slowly, the airlines have started to come back.
Another thing I would add to Speck that excites the team at Speck is, there's a large part of the market there that we don't currently service very well, which are these independent retailers for the likes of AT&T. There's a huge retail network within the U.S. that Speck actually hasn't tapped into yet. As Ramesh said, the team's been very focused on fixing the profitability. The team's now very focused on how do I crack into that. We'll see a little bit of that in 2016, but as we look forward, 2017, 2018, the ability to tap into the bigger market that are selling phone cases and tablet cases, is a big opportunity for that brand going forward. There's still a number one player that does $1 billion in sales, they are better penetrated in that market versus Speck.
That's really the next frontier for that business. As we think about what the team's excited for and getting ready for, and you'll start to really see in the next years is around further distribution of the brand in the U.S.
Clearly, the opportunity of Speck has to be also looked at a three to five year kind of a period.
Yeah. Exactly.
When we bought the brand, we were losing money, we wanted to make sure that will this brand become profitable. We don't want to just drive the top line not knowing how the profitability will look like. Now the team has brought back the profitability, which gives us now confidence that some of the profits that we are getting, we start to now invest back behind the brand. In the U.S., it's also about buying the retail points. You have to pay in some money to get yourself listed. We didn't want to also invest those money until we were sure about the profitability. As Kyle rightly said, our teams are now getting focused on expanding the distribution in North America itself.
The results you will start to see maybe in a third or fourth quarter of 2016, partially, but majorly probably in 2017, 2018 going forward.
Okay. Last two questions. First from Shen and then in front.
Thank you. Just two questions from me. Firstly, that mid to high single digit constant currency sales growth, do you expect to achieve operating leverage with that type of growth? I'll ask that question first.
As I said that, at this stage considering what is there, if we look at our business, normally we always say that you can find some operating leverage. At this stage, it's better to look at our business that if we grow a mid to high single digit growth on the top line. Our gross margin will remain more or less in the same zone as where it was in 2016. Maybe it'll pick up a little bit here and there, but that's more on account of different pieces moving at different rate. I think there may not be majorly an operating leverage. As we had spoken in the last time, that if I find that there is some possibility on that, we would like to invest something more behind some of the new brands that we have acquired.
In terms of the bottom lines, EBIT or EBITDA, whichever number you want to look at it, look at our EBITDA to remain more or less in the same zone as a percentage, and grow it in line with our sales growth, not having an operating leverage. When you really start looking at our business over a five-year period, we're not changing the business model. Which is always talking about the sales growth at, let's say, a double-digit sales growth, gross margin remaining more or less in the same zone. You have an operating leverage of around 50, 60 basis points every year.
Part of that, we would like to invest back behind our brand, move up the A&P spend from 5.5%, 5.6%, getting up to around 8% every year, increase by 20, 30 basis points, and allow that 15, 20 basis points to drop down to our bottom line. Considering the macro noise that we have in the background, we are now guiding that, take this year also as a year. On a normalized year, a five-year horizon, there's no change in our thinking and strategy.
Okay. Secondly, in the U.S., what proportion of your sales is company-owned retail exclusive of e-commerce? What proportion of that company-owned retail is gateway cities?
Yeah. 20% of our sales in U.S. today is coming from retail. Of that, about a third of our sales. It looks strange, that even when they told me also, I said that, "Are you sure?" That's the number. A third of the sale come from the gateway cities. It can have a very material impact, what happens in the gateway cities. It's not all so doom story, I would say, because what we start to find is, and there's an experiment which our teams are doing that, is to repopulate our stores. We're doing that in Florida right now with some encouraging results. To start repopulating our store with the more entry price point products in Florida. We are seeing that the drop in sales is bigger than the drop in the number of tourist arrivals.
Maybe the Brazilians are coming, the drop is -10%, we see our sales are -25% lower. Maybe they are finding our price points to be a little bit too much. We're trying to repopulate our stores, and I was talking last two weeks back with our U.S. retail team, and they feel that the first, it's just two weeks or three weeks that we have done these trials. The initial feedback has been somewhat positive because we were tabulating this number. The tourist is down by -10% and we are down by -25%. One of the thing which we also looked at in our store, that the conversion rate also had slightly come down. Which is a direct reflection that consumer is not finding that our price value is attractive enough.
By repopulating the store, maybe things can get better in the third and the fourth quarter of this year.
That 20% is exclusive of e-commerce or inclusive?
Is exclusive e-commerce.
Okay. Thank you.
Okay. Final question.
Hi, Manjuan. Just one quick question. If possible, can you share some color on the funding source of the Tumi acquisition? Are we going to raise any additional debt, what would be the cost of debt on that? Thanks.
Yeah. Cost of debt's still a moving target. We can't disclose that yet, but it'll be all funded by debt. We'll be taking about $1.9 billion of debt with a mix of Term Loan A, Term Loan B, we disclose that in kind of our initial announcements. Cost of debt's a bit of when you get to the market to price it. I think we'll have a good mix of Term A, Term B. Term A will be a bit cheaper, on a blended basis, I think we'll be quite happy with the cost of debt.
Great. Thank you very much for coming to our results presentation today. Thanks.