Good morning. While everyone takes a seat, I'm Mark Fisher, General Counsel and Secretary of PVH Corp. As you take your seats, I'm going to present our Safe Harbor statement. The presentations to be made during this meeting includes market and industry data from research, surveys, studies and publications issued by 3rd parties and information from customers. While we believe that the information is reliable, we have not verified it and do not represent its accuracy.
The presentation also contains forward looking statements that reflect our view as of June 21, 2012 of future events and performance. These statements are subject to risks and uncertainties, including those identified in our SEC filings. As such, our future results could differ materially from previous results or current expectations. These risks include the company's right to change its strategies, objectives and intentions, its need to use significant cash flow to service its debt obligations, its vulnerability to weather, economic conditions, fuel prices, fashion trends, loss of retail accounts, epidemics, war, terrorism, scarcity of raw materials and other factors, its reliance on the sales of its business partners and its exposure to the behavior of its associates, business partners and licensors. We do not undertake any obligation to update publicly any forward looking statement, including estimates regarding revenue and earnings.
The presentation also includes non GAAP financial measures as defined by the SEC. Reconciliations of these measures are included in our current reports on Form 8 ks identified in the press release announcing this meeting. The 8ks are available on pvh.com and the SEC's website. And now I'd like to introduce Manny Chirico, Chairman and CEO of PVH.
That was the absolute worst introduction I've ever had. That's what you get when you get an attorney to introduce you. Well, welcome everyone. Good morning. I'd like to officially call the 2012 meeting of stockholders of PVH Corp to order.
As first order of business, I would like to introduce the directors and nominees for directors who are present. To my immediate left and going around the stage are Fred Guerin, Craig Rydon, David Landau, Henry Nacella, Mary Baglivo, Jim Marino, Rita Rodriguez, Bruce Magan, Joe Fuller, Juan Figueroa and Margaret Jenkins. We also have representatives from Ernst and Young, Tim Tracy, the partner in charge of the engagement and a number of his colleagues from Ernst and Young are from our outside auditors are here today and are available to respond to any questions that may come up. The Secretary has informed me that we have an affidavit certifying the mailing of the notice of the annual meeting, the proxy statement, the form of proxy and the annual report. It will be annexed to the minutes of this meeting.
Becky Paulson, Wells Fargo Shareholders Services, our transfer agents has been appointed as Inspector of Election for this meeting. An oath of Inspector has been filed and will be annexed to the minutes of this meeting. Any stockholder who has not executed a proxy or wishes to change his proxy may vote or may vote shares in person by requesting a registration form and ballots and we'll have availability to do that during the meeting. The number of outstanding shares of our common stock eligible to vote as of April 24, 2012 was 70,000,000 360,188. In addition, the holders of our Series A convertible preferred shares are entitled to vote 2,094,680,000 votes.
Based on the number of shares of common stock into which the Series A convertible stock is convertible. The Inspector of Election has advised me that we have over 50% of the eligible votes represented at the meeting and therefore we have a quorum. In fact, we have approximately 69,000,000 votes or 95 represented at this meeting. I'm going to now introduce the matters to be voted upon. As indicated in the proxy statement, we have 6 matters to be voted upon at the meeting.
After introduction of each of these matters, you will be given the opportunity to comment on specific proposals. Please hold all your questions until the question and answer period later in the meeting and you will have a chance to comment on each of the matters that are being voted upon at the time we put them up for vote, but business questions should be held to after the business presentation. The meeting is now open to consider the election of 12 directors for the coming year. May I have the proposal?
Mr. Chairman, I move that the stockholders of PVH Corp. Elective Mary Baglivo, Emmanuel Chirico, Juan Figueredo, Joseph B. Fuller, Fred Goering, Margaret L. Jenkins, David Landau, Bruce Magan, James Marino, Henry Nassella, Rita M.
Rodriguez and Craig Rydon to serve for a term of 1 year expiring at the annual meeting of stockholders in 2013 is set forth in the proxy statement for this meeting.
Are there any questions or comments about the specific proposals? Does anyone need a proxy or would like to change their proxy? There being no questions, I close the discussion. The meeting is now open to consider the approval of an advisory on an advisory basis of the compensation paid to the company's named executive officers. May I have the proposal please?
Mr. Chairman, I move that the stockholders of PVH Corp. Approve on an advisory basis the compensation paid to our named executive officers as discussed pursuant to the rules of the Securities Exchange Commission in the proxy statement for this meeting.
Any questions or comments about this specific proposal? Thank you. Anyone need a ballot or proxy to vote their shares? There being none, I close this matter. The meeting is now open to consider the ratification of the appointment of Ernst and Young LLP as auditors for the current fiscal year.
May you please have the proposal?
I move that the stockholders of PBH Corp. Ratify the appointment of Ernst and Young LLP as independent auditors of the company for the fiscal year ending February 3, 2013 as set forth in the proxy statement for this meeting.
Any questions or comments about the specific proposal or any questions or comments specifically for Ernst and Young at this time? Does anyone need a proxy or a ballot to vote? There being none, I close this matter.
One more.
Juan Jimenez. Excuse me? Juan Jimenez. It doesn't seem to be. May I have the next matter?
I move that the stockholders of PVH Corp. Approve the amendment to the company's 2006 stock incentive plan providing for the increase by 4,500,000 shares. The number of shares that may be used sorry, may be issued under the plan as set forth in the proxy statement for this meeting.
Any questions or comments? There being none, does anyone need a ballot or a proxy? There being none, I close that matter I'd like to now introduce a number of our senior executives that are present today. First, I'd like to introduce Fred Gehring, the CEO of Tommy Hilfiger of PVH International. Fred?
Why don't we hold the applause for the executive team until that could take forever. Michael Schaeffer, Executive Vice President, Chief Operating Officer and Chief Financial Officer of the company. Thank you, Mr. Schaeffer. Ken Duane, Chief Executive Officer Wholesale Apparel.
Tom Murray, President and Chief Executive Officer, Calvin Klein Steve Schiffman, Group President and Chief Operating Officer, Retail Gary Scheinbaum, Chief Executive Officer, Tommy Hilfiger, North America Mark Schneider, Group President, PVH Wholesale. I'd like to introduce and talk about somebody now for a brief moment. We have someone who's been with the company since 1964. At the time, the company was barely $50,000,000 in sales. Today, the company is over is close to $6,000,000,000 in sales.
Alan Serkin has been a major contributor to the company. He has been a great partner for all of us at PVH. He's been a mentor. He's been involved in every major transaction and acquisition. He's been involved in every strategic decision that the company has done over the last 25 years.
He basically invented the designer dress shirt business and perfected the dress shirt business in America. And he's been he is an icon in the industry. And all those things are true. But I think at PVH, when you walk the hallways and people talk about Alan now and we talk about Alan 10 years from now, Alan's legacy will be how he's treated people, how people were always able to seek him out for advice, mentorship and for being such a great business partner with our key retailers. And I just lost the whole screen.
And with that, I'd just like Alan to take a stand and thank him for his great service to the company. And when it comes to Alan has many talents and I think the thing he's done best is he married well. And we really need to thank Bonnie Serkin who's been Alan's partner and has allowed Alan to make all the sacrifices in his personal life so he can really focus on the business and been such a critical part of PVH as well. So, Bonnie, thank you so much and he flowers a few years.
I'm going to just
do I have to do anything with the screen or is it just dead now on my computer? Oh, terrific. And now we're going to do the we're going to review the business plan and I'm going to ask each of our senior executives that run each of the businesses to get up and talk. And besides that you'll see the proficiency in which they run the business, it will also be an eye test since now they have to look at this screen instead of this screen to make sure they can see the screen. So I'm going to start with it and as the maintenance work is going on.
Thank you. So I'll give you a brief overview of some of the initiatives going on at the company. Just to put the company in perspective, the last 2 years, we've seen dramatic growth. The Tommy Hilfiger acquisition has basically doubled the size of the company and our organic growth over the last two fiscal 2 years has been in excess of 10% to 12% a year. So we've really enjoyed great growth.
We're positioned today as the 3rd largest apparel company in the world and seeing significant growth as we go forward, if we can move it forward. When you look at the breakout of the business, look at it by brand, just to give you a sense of each of the key components, the Tommy brand about 50% of the revenues and approximately 45% of the profits.
The Calvin business is a
licensing model representing about 30% of the revenues and about 37% of our overall profit. And our heritage business, which represents our overall profit. And our heritage business, which represents today about 30% of the volume and about 70% 17% of our overall profitability to put each of the businesses in perspective. On a global retail branded basis, the business represents about 5 point Tommy Business represents globally about $5,600,000,000 in global retail sales, Calvin approximately $7,600,000,000 in global retail sales and our heritage business is just under $3,500,000,000 in global retail sales. Looking at it from a geographic point of view, in 2,009 pre acquisition, our business would have broken down by revenues, by business segment that Calvin Klein represented at the time.
Excuse me, Calvin Klein represented approximately a third of our business on revenue basis and about 40% and about 58% of our profits, heritage about and that time 67%, about 42% of our profits. And as you can see as the business has changed, Calvin and Tommy combined represent today about 70% of our overall revenues and represent a little bit over 80% of our overall profitability. And we would expect those trends to continue as our heritage business will continue to grow in the low single digit type of range on a percentage basis. And Tommy and Calvin are looking to grow in the 8% to 10% range each and 3 years from now would expect the revenues to be closer to 75% and the profitability approaching 90% of the overall company. Again, from a geographic point of view, you could see the dramatic change that's taken place over the last 2 years.
Our revenues have grown from just a little bit over 10% in 2009 internationally to just about to just over 40% today. Our profitability, which was about a third in 2,009 coming from international markets, today represents about 54% of our profits coming from international markets and the U. S. Representing a little bit over 45%. So that gives you a sense of the overall businesses.
We've enjoyed since 2,003 significant growth. Our revenues on a compounded annual growth rate have grown at an 18% growth rate and our earnings have grown almost at a 25% rate. We measure our sales all from the acquisition of Calvin Klein beginning in 2003 and that growth has clearly accelerated. The last 2 years in 2010, we saw earnings per share growth of almost 50% and last year our earnings per share growth was in excess of 25%. So clearly we've continued to have a significant momentum gaining market shares with all of our major brands.
And with that, I'm going to turn this meeting and have Tom Murray, our Chief Executive Officer of Calvin Klein come up and give you an overview of what's going on at Calvin Klein in the business. Tom?
Okay. Thank you, Manny, and good morning, everyone. In 2011, the Calvin Klein brand achieved over 7.6 $1,000,000,000 in retail sales globally. I think most of you are familiar with our brand Pyramid, but just to refresh, at the top of the Pyramid is our Black Label collection business, which really sets the
halo for our brand. Middle part of the
Pyramid is on a brand. Middle part of the pyramid is on a gray label, that's our bridge business. And the biggest business at the base of the pyramid is our white label business. We operate over 60 domestic and international licenses around the world and we do business in over 100 countries around the world. Our business model is very diverse.
It's across multiple product channels, price points and geographies. And you can see that we did about 50% of our business in North America in 2011 and about 46% of that was in the United States. The fastest growing region is Asia, but we saw robust growth out of all regions last year. And we expect to see something similar this year excluding the slowdown that's occurring over in Europe. Since the acquisition in 2003, we have achieved 13% compounded annual growth rate.
So we grew the business from $2,800,000,000 to over $7,600,000,000 A really important part of the way we do business internationally is freestanding stores. We have 5 freestanding store concepts. These are full price stores. We ended the year in 2011 with over 7 50 stores. We added 128 stores.
We will add another over 120 over 120 more stores again this year. Just a few slides for each of these retail concepts. This is our Madison Avenue collection store. It's a flagship store. Every week people from around the world in New York City, around the United States everywhere in the store, it has a very brand impacting impact enhancing impact on people when they're in the store.
This is one of the CK stores. This one's in over in Hong Kong on Queens Road, which is one of the best shopping districts in Hong Kong. This is an expanded format jeans and underwear store about 4,000 square feet in Hong Kong, very productive store. Put this one in because it's just a great looking store. It's a 2 level jeans store over in Beijing.
It's very productive plant there. Really important part of the way we keep the image and awareness at a very high level globally for Calvin Klein is our advertising of course. We spend over $300,000,000 a year advertising the Calvin Klein brand. And in April of this year, Time Magazine named Calvin Klein 1 of the top 100 icons in fashion style and design cited as one of the most influential fashion icons since the magazine's inception in 19 23. So we're pretty proud of that.
So a key strategy of ours obviously is product innovation and strong marketing and advertising to report to support the product innovation. Several of the things we did last year, events was the CK1 lifestyle launch for spring of last year. So it was a product and marketing program that was very, very successful globally. Also the bold men's underwear and a lot of bright colors. I'm sure you saw that advertising.
In women's power stretch jeans also in a bunch of bright colors. So great example of pairing up great marketing and great product for a global success. As usual, we expanded our fragrance portfolio in 2011. We added CK1 Shock, Calvin Klein Beauty and Forbidden Euphoria in 2011 all of which have performed well for us. Some of the key things that are going to be going on in 20 12, as usual, we'll have the men's and women's spring and fall runway shows.
We're going to have the Milan show for men this coming Sunday. And so we're looking forward to going over to that. Get a lot of press out of these shows as you know. We introduced a global color cosmetics business beginning this spring. We started in 150 doors.
We're going to roll it out to about 4 50 doors by fall. I'm really happy to announce the fact that everywhere we've put it so far it's selling very well. And we're getting the best success when we present the color cosmetics next to the fragrance inside a retail environment because the critical mass is just really helpful and we're really pleased with that and very excited about the potential over the next few years. The underwear business we're celebrating the 30th anniversary this year and we just had a large scale event over in Korea a few weeks ago that the team and I attended. Very well received over 1,000 people came in and it was a very successful event.
Over at Bassoul this year, the International Watch Show, we'll be celebrating Calvin Klein 15th anniversary for our watches and jewelry. The key as it relates to fragrance, the key launch for us this year will be a new men's master brand called Encounter, which will be launched this fall, featuring actor Alexander Skarsgard who you may remember from the True Blood series. So we expect big things out of that and there'll be a huge marketing push behind it. Another important way we keep the image and the awareness at a very high level globally is our editorial coverage. In 2011, we achieved over $400,000,000 in the advertising cost equivalent of editorial coverage.
This is mostly due and large part due to the fact that we're in that collection the Black Label collection business with all the celebrity dressing and all of what goes along with that. In the United States alone, we received over $40,000,000 in U. S. Television ACE value. Now I'd like to show a 2 minute video just highlighting some of the recent activity in the PR world.
Calvin, Calvin, I've been wearing all my life. Nice.
You're being rolled down in a gurney,
and yet you're talking about fashion.
For example, as nurses, they're wearing next season Calvin Klein and so am I.
We're doing well in the United States. We're doing extremely well in Asia. And our comps are only not well in Europe. We're well known in every corner of the world. And we have a high image with consumers.
This is just really a small part of what happened. We wanted to keep it to 2 minutes, but that's the kind of activity that creates this over $400,000,000 in the advertising cost equivalent. The revenues in 2011 at Calvin were $1,100,000,000 The licensing component here is reported as royalty. That's why the number is quite different than the retail numbers I was talking about earlier. Operating income of $278,000,000 with an operating margin of over 26%, which is really one of the great advantages of the licensing model.
The Calvin Klein business really breaks down into 2 parts licensing and wholesale collection on one side and our owned and operated wholesale and retail businesses on the other side. These businesses are supported by dedicated in house design studio, in house PR agency and dedicated in house advertising agency. Our top 3 licensees represent over 70% of our licensing income. The biggest licensee is Wannaco. 2011 sales were over $2,800,000,000 in underwear and jeans wear.
They believe they can double this business over the next 5 to 6 years. Key initiatives in 2012 were bold underwear I talked about before. But the big initiative for the Q3 will be liquid metal Jeans men's and women's. That's global with a major advertising spend behind it. We are encountering some difficulties in the business over in Europe, particularly in Southern Europe.
We're over penetrated down there in Spain and in Italy. So that coating number 2, in 2011, we did over $1,400,000,000 in retail sales and moved from the 4th position to the 3rd position as the 3rd largest designer fragrance brand in the world. As always, we had multiple successful launches in 2006, 2 CK1 Shock, Forbidden of Euphoria, both of which were very successful. For fall, I talked about the new master brand Encounter. In addition to that, we have a new global advertising campaign for Euphoria in the Q3 also with a major ad spend behind that.
Number 3 is G III with over $900,000,000 in retail sales in 2011. You can see all the categories we're in here outerwear, women's sportswear, dresses, suits, women's bags and luggage. And we left off this slide the newest business which is Performance, which is already getting a tremendous amount of traction. That's also going to be a freestanding store business as well. So very, very strong performance across the board at G3.
Our owned and operated wholesale and retail businesses in 2011 generated $638,000,000 in revenue. The men's sportswear business had a great year with $150,000,000 in sales and we believe that business can be $200,000,000 plus business in the not too distant future. We also have a dress shirt and neckwear business in the wholesale side there. And in retail, we have 115 stores principally in premium outlet centers with $416,000,000 in retail sales in 2011 strong comps. Last year, we comped at 16%.
In Q1 of this year, we're comping at 9%. These are just couple of slides to show you how some of these shops look. We just expanded the Herald Square shop by about 900 feet to almost 2,700 square feet. Great looking shop and very, very productive sales space. If you haven't seen it, you should go over and have a look.
This is a 2 1,000 square foot shop in South Coast Plaza. I put it in because I just think it really presents the product beautifully. So we're also very excited about the European opportunity for our Bridge business. We acquired that business recently from Orneco as most of you probably know. That business is going to be put on the Tommy operating platform over there.
Fred and his team will be running that business. And as they've had such a major, major success with Tommy, we feel that the strength of the Calvin Klein brand and the operating excellence of Fred and the team that this is going to be a major success for us. So first, we're going to start in fall of 20 13 with men's apparel and accessories and we're going to follow a year later fall 2014 with women's apparel and accessories. And we really believe this
is a
$500,000,000 opportunity over the next 5 to 7 years. So in summation, we're going to continue to broaden distribution globally and grow our market share, continue to enhance and extend product. And we really believe that between 2011 2014 that we can achieve compounded annual growth rate of between 8% 10% to grow our business to $10,000,000,000 in sales. Thank you. And with that, I'd like to turn it over to my friend and colleague Fred Gehring, CEO of Tommy Hilfiger.
Thank you and good morning again. Yes, the Tommy Hilfiger business in 2011 has been truly firing on all cylinders yet again I have to say because we have had a number of years now where we've been doing really, really well. The story is actually better than the numbers to be honest because I think the biggest accomplishment besides the strong financial performance has been that I think we've found further progress in the quality of the positioning of the brand to its core value the way it once upon a time was conceived. I think we live that brand today and we do it better than ever. The marketing plays a big role in that.
Obviously product at the end of the day is king. But the marketing particularly in the last couple of years has really given us a major boost both in the essence of the campaigns. So the hill figures are beloved truly around the world both aspirational as well irreverent brand right with a smile, but really carrying us tremendously. It has added us enormously to the development of our brand awareness in the sweet spot of positioning of classic American cool, classic with a twist. And I think we are generally recognized as being the most important proven accessible designer lifestyle brand and the word accessible in tough economic times isn't the bad one to have.
We look at it over the last 5 years with 14% CAGR. It's been internationally speaking obviously significantly higher than that. But America in this 6 year period has gone through a major turnaround and is contributing tremendously to this growth now as well. So nothing to be not pleased about. Over the globe, we now are in excess of 1100 stores and 10,000 doors.
So the sales organization of Tommy Hilfiger is quite complex, especially when you go overseas where you depart the world of concentrated retailing in America and you go to the world of fragmented retailing in Europe, servicing that level of complexity in the number of accounts over all these different markets is truly a machine really. And I'm referring to it particularly now because I'm actually arriving yesterday and leaving again tonight from the European sales meeting the line opening where we tackle spring 2013 1st 4 days with almost 1,000 sales related individuals that cover Europe and then from tomorrow onwards with several 100 sales related executives that cover the rest of the world from everywhere. So it's twice a year the essential moment of our business where we build our order book for the future. And if you know that Europe is 75% wholesale, building that order book obviously defines everything. And I have to tell you everything looks really, really promising.
In the world of marketing, a little bit more of that as I said been really, really strong $170,000,000 of global marketing spend doesn't come close obviously to the budgets that are given to my friend Tom. In spite of the fact that we're being short changed by the group in this respect, we pull off this incredible performance. The Meet the Hill figures campaign is now in its 3rd year and it's coming stronger than ever. I think the consistency of our brand image pays off. Consistency is always a good thing, especially when you're consistently doing something that feels that right.
We've really more and more adopted what we call the 360 degree marketing approach where everything is touched, whether it is in in store experience, windows, the website, the product branding and labeling, the product design and obviously all communication. A lot of individual issues are listed here. You can read through them for yourself. It's just a snapshot of what we're doing is ongoing activity everywhere in the world, super energy in the brand and I think the consumer recognizes it and appeals to it. When you look at the editorial growth, we've made major progress here from 2,009 to 2012.
Again, it's the effectiveness of the campaign, not just necessarily the spend. The spend has a lot do with it as well obviously since we are part of PDH. We've significantly increased the investments behind marketing and obviously the editorial support is not completely disconnected from that. But I think largely it's also to do with the fact the editorial world really appreciates the positioning of the brand and the quality of the product as it's shown. We do have a little bit of a brand video that shows the world of Tommy Hilfiger and particularly interestingly how different it is from the world of Calvin Klein and which is one of the beauties I think of these two brands being under one roof and completely supplementary to each other.
So I think if you can play the video.
That into what I do. The brand is a global preppy lifestyle brand that we signed a collection of preppy all American clothes. I added all sorts of detail. It really gave the close a real distinct personality.
It's about sort of taking Preppy to a new level. It's about more sophistication, growing it It's about refining it, quality, fit. It's about really incredible fabric.
I think the merchandise first, the attitude, the image, the people, the music in the store, the whole feeling, the ambiance. Our product line is great. Our service is fantastic. And the store itself looks very unique and different from anything else I've seen. It is our mission to make and deliver quality products responsibly by minimizing our impact on the environment and caring for the entire Tommy family.
Okay. So on to actual numbers. You've seen most of them already, I think. But anyway, reported revenues are actually net sales of 3 €1,000,000,000 in the group, €1,800,000,000 coming internationally and €1,300,000,000 from North America. Operating income €350,000,000 plus which is about 11.5 percent operating margins.
When we go to Europe, as you've seen €1,000,000,000 plus €1,400,000,000 I have to tell you honestly when in 1997 we started with our first order, we never in our wildest dreams thought we would reach this. And there are very, very few apparel companies let alone American Apparel Companies that reach a level of this penetration. So we have 26% CAGR since 2000 and that includes living through the Great Recession. Premium brand positioning for those of you that travel Europe, you will see that we are really sitting side by side with some of the people we like to sit side by side without mentioning names and do so successfully. So in many cases, beating them.
Strong European wholesale bookings even to this spring 2012 season, what we've just completed shipping, we had an order book of more than 13% growth like for like for a year. All 12% the season we start to ship shortly, we have about 4% to 5% growth, which is mid single digits. I think incredibly strong compared to what generally has been happening in the industry this season, but a little bit soft compared to our historical trends, partly of course also a result of the fact that we are treading carefully right now in this uncertain economic time. Comp at retail stores 2011 throughout the entire year we had comp across the board all of Europe included of plus 18%, so quite phenomenal. And even this Q1 of the fiscal year we've been able to comp positively with 5%.
So that too amazingly strong compared to the market, but certainly a little bit slower than the incredible trends we had in the recent past. We have our localized management approach where we really carve up Europe in individual regions that have great similarity in their appeal that the brand has, but great difficulty in dealing with local differences. And we take that very seriously and I think it's one of the main reasons of our success there. And for your information, the Northern and Central European markets represent over 70% of our revenues. The Mediterranean markets that obviously are currently quite difficult are more in the 25% of our total revenue range.
So they represent important numbers, but they are far from the majority of our business. We have opened a lot of stores. We continue to open a lot of stores. Just a few highlights. We're very, very happy with the opening of the Brompton Road flagship store right between Harris and Harvey Nichols.
Actually we have the entire building that goes up 4 stories where we have also our new U. K. Headquarters showrooms and offices. So a really proud moment in the Fabry store. If you're in London make sure to visit it.
Equally exciting in Hamburg a fantastic store that also does enormous business. I mean Germany is a true success story for us both in our wholesale presence, but very much also in our retail penetration at the meantime. As I said, we carve up the European markets very specifically in regional needs, but also purely from an economic perspective. There is our brands and there is a buying power in the market and we constantly monitor that and kind of like break up the market in 1 of 3 groups. The group we call nurture, when we say nurture it means we don't try to push the brand.
We work with the retailers we have. We service our customers. We service our consumers. We try to trade up, get a better mix in the stores, but we don't really are growth focused per se, because we feel we're already quite present and we don't want to overdo it. That includes luckily Ireland.
We've been a very, very big business in Ireland. We still are a very big business in Ireland comparatively to the market and the market obviously is very difficult. Same Spain. Spain have a very large presence comparatively speaking to the size of the market driven by El Corte Ingles obviously our main retailer in Europe. But we don't push for further growth in Spain.
We try to nurture it. And similarly Belgium and the Netherlands for just reasons of penetration. In the middle group, it's a very important group. We think there's opportunity to expand. We can do more with certain divisions.
We can do more with certain product groups. And in some instances, we can also do more with more clients. And in any case, we can open more retail stores. That includes all the Germanic countries where we are very sizable, but we can easily grow a lot more. It includes Scandinavia, which is relatively small for us and the emerging market of Turkey where we have strong presence but major growth rates possibilities.
And then we have the markets where we kind of like can still try to conquer. If we were to bring last group of markets to the penetration we have achieved in the first two groups, then that alone will allow us to double our business in the aggregate. That includes very strong the Eastern European markets led by Russia where we have great momentum. It includes the Middle East where we have great momentum. And also includes the 3 big ones France, U.
K. And Italy. In all three, we've been having strong double digit traction. We've been obviously slowing it down particularly in Italy for matter of concern of prudence and credit control reasoning. So we may well for the next 12 to 18 months shift Italy to 1 of the 2 left columns.
And this is a changing thing all the time. I just wanted to share with you that we don't look at Europe as one entity and okay how do we grow. We break it up and we seek the pockets of growth opportunity and there are many. When we go outside of Europe, we go to Central and South America first of all. The aggregate $320,000,000 in sales at retail level, very strong business in Mexico through a licensee.
Basically all these businesses happen through licensees, long standing relationships, a Mexican licensee and a South American licensee, 150 franchise stores in total. And notably for us, actually the 320,000,000 as big as the number is, only a small fraction thereof comes from Brazil. Brazil therefore has a big opportunity and we are closely studying ways to unlock that potential over the next couple of years. Then we've got Asia. Altogether about $600,000,000 in retail sales.
The most important own operated market, a subsidiary. It's also one of our few really let's call it challenging markets at the moment. It's a combination of a difficult economic environment and the choice we made to reposition the brands more in line with the other international markets. So we're in the process of trading up. It's not obviously an emerging market, but it's a huge economy.
If we look at our presence and penetration and success in Europe and then we see some of the other parties that we compete with in Europe or what they do in Japan then that would give us the possibility to double the business in Japan as well. But it's a market that certainly has its issues and we
are in the middle of battling with it. So we're confident that we're making significant
investments there. I think making significant investments there at the moment. We're confident we'll turn the corner there. But it's an important market for us at 287,000,000 to 160 owned stores. China in a joint venture is doing really, really strong, only still €60,000,000 or €80,000,000 I think, doing really, really strong only still €60,000,000 or €80,000,000
I think this is where my glasses tell me.
I think it's €80,000,000 And strong growth, it will take some time until this becomes really substantial, but we're very confident that it will work. Same for India and then the rest of Southeast Asia, again all done through licensees. In the aggregate, dollars 175,000,000 almost all through independent franchise stores as opposed to traditional wholesale multi brand customers. Some of the highlights there. As I said Japan, we just opened in Tokyo on the busiest intersection of the world really.
This flagship store is doing quite well. It's a major impact for the brand. It's the first time that we have that level of visibility in the market. And not only have we done it in Tokyo, we've done it in Osaka as well. So these two stores we think will be key to our efforts to try to step up the level of brand awareness in the Japanese market.
And then we go obviously finally to North America. For a number of years, America was a challenge for us where the brand had headwinds. That period is behind us now for quite a time. And I think America is firing all cylinders $1,200,000,000 The MAZE is exclusive. It's very effective and efficient for us as a stage for which we on which we can perform and really do well.
Canada, we're trying to duplicate that now by also entering the Bay. The comps in the United States all over 2011, 14% -plus and we're actually in the Q1 headed to 16% -plus. So again, the brand is as good as ever been in this market and we have every reason to believe that we can have a good future ahead of us. So health care also our version thereof looking obviously much better than the one from Calvin. Women's health care really, really great.
I didn't see that. And then very importantly a great, great profit generator for the company here in the United States, our company stores. They are really a machine of excellence in retailing in my opinion. This is the Herriman store, a mega store in New York. And then here is the second photo of the Hermes store.
Finally, when we look at the future, I think in our business the way it's going, the way we have left behind us the areas of difficulty and we see continued sustained success in the areas of opportunity, Normally, we would say there's no reason why not to extrapolate the trend from the past into the future. But the world being what it is, we have to believe that difficult times are ahead of us even if we wouldn't see much of it if anything in our real business. Nevertheless, we therefore feel that going forward with an 8% to 10% CAGR over the next couple of years is a prudent approach and one that we feel comfortable we should be able to like outperform against. So with that, it's the completion of Tommy Hilfiger's update for this year. I'd like to give it to my colleague from the United States, Mr.
Ken Way.
All righty. Good morning. I'm going to follow Calvin Klein and Tommy Hilfiger. That's going to be enjoyable. But before I begin that, any time that I want to go into the heritage division, I want to first thank Alan Serkin for all these years of personally mentorship and helping me navigate all these difficult channels, these complex varieties that we manage and how you've sat over that excellence, which is our dress shirt division for so many years.
Thank you very much. I'll call you back. So we manage a portfolio. In the Heritage division, we manage a portfolio of brands. We have a portfolio of customers as well as a portfolio of partners.
And within that, our revenues for this year, dollars 1,800,000,000 $1,880,000,000 primarily driven by the 3 divisions that you see below, dress furnishings, sportswear and retail. They're cut into essentially a third, third and a third. Our major brands within that are the Izod, Vance Houston, Arrow and Bass brands. And within this year, this year was a coming out of 2011, we're a moderate play within the department stores within our partners. And the price of cotton as all of you know went from $0.70 a pound to $2.40 a pound within this past year.
But the good news is as we come into the second half of twenty twelve and certainly as we head into 2013, price of cotton is back to $0.80 a pound. So we're really looking forward to that and the opportunities that that will present to us in the marketplace as we move forward. In category, we own 50% of the neckwear share. So our neckwear division, which was the Superba division and as we've acquired different companies across the country, 50% of the neckwear sold in department stores and major chains across the United States is a Superba neckwear or PVH. 45.5 percent of the dress shirts and we continue to gain market share in that area.
And again, I talked to that, that is an area of excellence for our corporation. The corporation, Phillips Van Heusen or today PVH was essentially built on the back of a dress shirt and all that it's accomplished. The woven shirts, 14% of the market share in our sportswear brands in woven shirts and knit shirts 12.6%, casual pants 7% and a little less than 5% in a new division that we've undertaken, which is our underwear division. I'd like at this time to show you a brand video that gives you a feel for some of our brands and a little bit of our marketing that goes on across the nation. So when you're breaking down the heritage business and looking at the 2011 results, take the dress furnishings division, which is our neckwear and dress shirt division and all that they accomplished and you throw in there the Van Hughes and sportswear and the arrow business, it represents $1,000,000,000 worth of sales, dollars 119,000,000 worth of profit, maintain and invest continue doing what they're doing because those that group has shown how we can control market share and how we can continue to grow.
When you look at what's going on in the dress shirt world and the types of brands, essentially what we've accomplished in the dress shirt business is that we have a number of different brands, those that we own Tommy Hilfiger, Calvin Klein Eyes, Odd Van Heusen and Arrow, those that we rent to work together with Chaps, Michael Kors, Ted Baker, DKNY. And at the same time, we've grown from in the middle to outside the middle. We sell Nordstrom's and Neiman's as well as we sell Walmart down below. So we have cross channel distribution within our dress shirt and neckwear world across the entire nation. And a very successful business and continues the financial results in 2012 continue in the dress shirt division, neckwear division.
When you look at the heritage brands, Van Heusen and Arrow, we maintain and protect the business longevity. So growth through cross channel expansion, one of the decisions we made this year in 2011, which came about in March of this year, was to take the Van Heusen brand in the mid tier, which had been at JCPenney and move it to JCP today from JCP, it's JCPenney at the time, JCP today, JCP today and move it to Kohl's and Kohl's took on the Van Heusen brand in the mid tier and then JCP took on the Arrow brand. So we have cross distribution of both brands within that world and been met with great success. On the retail side, solid performance at retail in the Van Heusen store, they act as a strategic complement to our wholesale business and we'll continue to strengthen the value proposition and we have targeted store growth along with an expansion going forward. When you continue to break down the heritage results, so that was our dress shirt, Van Heusen and sportswear and you look at the Timberland and Isard women's business of which we exited this year and exited in 2012, they were generating $140,000,000 in sales and we had lost $3,300,000 So we got out of those businesses immediately and we're no longer operating those as
we go forward. And then
you look at the Izod and Bass business, dollars 610,000,000 worth of sales, generating $11,000,000 2 businesses that in the past had been very extremely successful, had met some of the headwinds, had great opportunity, brand franchise recognition, customer recognition. So let's go to work on those and what we're focused on and the team is focused on in 2012. So within eyesight, turn the business around, focus on the men's core sportswear business. We exited as I spoke about what went on in the women's division. We developed a strategic plan, strengthen the Izod men's business and connect the Izod brand to the marketing to the consumer base.
A lot of that you've seen in some of the most recent advertising, golf, Izod has always been known as a golf brand, Izod has always been known as a sports spirited, colorful, inclusive brand. And that's what you'll see in our marketing as we move forward. JCP, which is a key partner for wholesale, one of the frustrations that our customers or our consumers you had seen out in the marketplace is when we did it, when we did our consumer research, the consumers would come in and say, I like your advertising, I love your product, but when I go to the stores, I don't get the energy. I don't have the advantages of the Calvin Klein shops or the Tommy Hilfiger shops. Where do I find it?
Where do I shop for it? And quite frankly, it was just a matter of finding a loving partner around the United States. In steps JCP with their new franchise, their new opportunities, they wrap their arms around 600 plus stores, which will launch, will be in place for September 1, dollars 10,000,000 investment on our part, significant investment on the JCP part and a commitment with JCP for the next few years. So as that Izod consumer goes out and shops the marketplace and walks into JCP beginning for July 1, they'll see the Levi's shops and beginning for August 1, they'll see the Levi's shops and beginning for September 1, they'll have the IJARD shops and there will be that consumer experience with energy at retail. At our own retail stores, our own retail stores continue to act as a strategic complement to what we're doing.
They're active inspired product focused on the emphasis on golf when you go into our own retail stores and we have a targeted growth store strategy there. A little bit of what you saw in the video when we walked you through the video, these are the new shops and this is what they'll actually look like that are going into the JCP stores on September 1 and you can see how they're presented. We'll have 70 doors with over 1,000 square feet and the balance of the doors will be in that 600 to 700 square foot range. So it gives you a good look at what they look like today in prototype and what they'll look like beginning September 1 on the floor at JCP. Bass, Bass was a division again that was challenged at retail.
It's a heritage brand for us. It's a brand that we've owned and operated for a number different years. So what do we need to do in 2012? There's been a lot of significant changes that were made within 2012. Right size the real estate portfolio, get that on, elevate the in store experience as the consumers come the stores and see what's going on.
We elevated the in store experience and strategic product investments. We own parts of that business called the regions, called the box SunGen, strengthen the price and the value proposition and go those businesses and embrace those businesses. So with all that in place as we move forward, we feel very strongly about where we're going in the heritage division. We feel we have passed that. The most difficult part is behind us as we look forward and certainly into the last half of 'twelve and the first Q of 'thirteen.
And with that, I'm going to bring Manny Sherico back up on stage. Thank you.
Okay. When you put it all together, everyone's focused on the current year, what's happening in the business. Despite all the macro uncertainty that's out there, we continue to perform. When we started the year back in January, we first came out, we said to the market, we expected the first half of the year from a profitability point of view to be flat. As it's turned out, the Q1 was up on an earnings from an earnings per share point of view about 6% and we're now planning the second quarter to be up 10% to 12%.
So we felt that this first half of the year was by far the most challenging that we would have from a product cost basis, currency issues that we're dealing with from an overall basis and then the overall pressure that's going on at retail. And we've been able to weather that storm and outperform our estimates and our projections. As we look at the whole the total year, even given those trends we see in the business around the world, the trends in the macro environment, currency headwinds, it's worth about $25,000,000 to the bottom line this year. The pressure that we're seeing from a cost point of view, particularly in the first half of the year, despite that, we are comfortable looking for growth in earnings per share of 14% to 16% this year. Some of the current trends in the business in North America, through Father's Day, we really had a very strong Father's Day on all levels wholesale and retail in North America.
Our wholesale businesses outperformed the competition in just about every channel of distribution both in the collection businesses of Tommy and Calvin as well as our main floor and classification businesses at Heritage continue to see very strong performance against the competitive base. In our retail, we've continually talked about our trends. The Tommy Hilfiger and North American comp trend are in excess of 12%. The Calvin Klein North America trends are running at a plus 7% rate. Both of those businesses are being planned against our projections in the 4% to 6% range from a comp point, so clearly outperforming there.
Heritage is performing right on plan from a comp point of view at about flat to up 1% depending on the brand. So the U. S. Is a healthy market for us. We continue to see strong gross margin performance.
And we think as we go into the second half of the year, given the turnaround that we should see from a costing point of view with product that would really hit us in the 3rd Q4, we are very excited about as we see the second half laying out. Internationally, everybody is focused on Europe given what's going on there from the economic point of view, the debt crisis that's going on there. Despite all of those issues, our Tommy Hilfiger business continues to perform. Fred talked about the wholesale business and the strong spring summer bookings that we have. We continue to see strong sell throughs.
Our wholesale bookings for fall and holiday are up about 4% to 5%. Our own retail stores in Europe for the Q2 have actually accelerated. They're up in the high single digit range as we go forward. So despite all the noise, all of the uncertainty that's in that market, we continue to see strong performance. Moving internationally with the Tommy brand, our business in Asia, particularly in China and India, those two big markets, we continue to see strong growth there for the brand.
Those are licensing models. Our business in South America is very strong. Calvin Klein internationally, we're having very strong performance in Calvin Klein with our licensing model in North America. And as we move internationally, Asia and South America continue to be strong growth vehicles for us. We see no significant slowdown there at all.
We watch it very closely. Moving to Europe, we've talked about some of the challenges of the European, especially in the Southern European markets where our apparel business in particular, in particular our jeans business is under more pressure there. Excluding that business, all of our other businesses are flat to up slightly in Europe. So we feel good about that performance from a competitive point of view and recognize that the jeans business in Europe really needs to improve. Our partner Waneka is working on a number of design and product initiatives and we're working hand in hand with them to improve that business.
I think we'll start to see improvement in that business beginning in 2013. So overall, as we look at these results and the earnings growth that we called out for the year, if the current trends in the business were to continue and this slide has now been updated for a projection for the current year's earnings at the midpoint of our guidance, if those trends continue through the Q2 and then into the second half of the year, we should be able to significantly outperform our estimates as we go forward. We have good momentum in the business despite the overall environment and we feel very comfortable with where we sit today and as we move forward as a company. And as I always like to just touch on and I won't spend a great deal of time, but just know that this a priority for the company. Our corporate social responsibility initiatives are key.
As I always like to say, as a company, we need to measure ourselves by more than just our bottom line or our balance sheet. We are very focused on the impact we have around the world. We focus on key areas, our workplace, our employees, our associates around the world. We focus on the communities in which we operate, both where we sell product and where we make product. We're very focused on that.
We're very focused on factory compliance around the world, human rights issues around the world, the right to organize around the world for labor. We try to be a force for change and improvement of social and economic environments in which we operate. And clearly, we're a company that thinks about sustainability. We recognize the impacts we have in the environment and we continually try to minimize and improve that situation as we go forward. As I touched on, I'm not really going to talk a great deal in the workplace.
We focus on our associates. We engage our associates. We ask what we do well and we try to improve there and we ask what we don't do well, we try to make changes there as we go forward. Training is a big issue for us as we go forward and diversity as well. The community, we constantly give back both our time, our energy and our financial resources and we've seen a significant increase here as you would expect as the company has grown and we continue to expect as we grow that our investments in the communities in which we operate will also grow.
We think we've been leaders and we feel strongly about this on the way we source product around the world and the impact that we've had on the economies and the workers around the world. We recognize that although we don't own factories that we have a responsibility to those workers to make those products in our vendors and the factories that we utilize around the world to have a positive impact where we are and we really work very hardly both from a wage and improvement base there, a benefits area as well as the safety point of view for the workers around the world. And I touched on the environment. It's clearly it's critical as we grow as a company that we take a leadership role here as well. We're in the early stages of really understanding what that means, working with a number of key players around the world, a number of NGOs and non profits to really help us become what we would like to be as world class in this area and over the next 5 years, we'll be working towards that initiative.
The other area that's key for us is the way we talk to our shareholders, our transparency. I think the issues that have plagued Corporate America and some of the scandals that have occurred over the last 3 to 5 years, I think it's we have really tried to take a leadership role for our industry, talking to our investors to be transparent, to talk about how our business is, to talk what our strategic plans for the business, not to surprise anyone. We make ourselves available and I think it's nice to be recognized that for the last 3 years by Investor Magazine. And clearly some of these other goals, it's not about keeping scores or saving trophies, but I think it's important to be recognized by independent people for the kind of work that we're trying to really portray here. And I think it's a testament not to me in any way, but it's really a testament to our associates around the world, the pride they put into their work and a testament to our associates around the world, the pride they put into their work and the efforts they put into these areas.
It's really a cultural it's a cultural asset that we have, that we focus on and it's critical to our success as we go forward. And with that, if we could turn the lights up. At this point, I'll open up to any questions that any stockholders or shareholders may have, any questions that anyone might have about our performance or our business. And we have our first question.
Good morning. Good morning, Mr. Chairman. Philip Berman, Portfolio Manager and Shareholder. Some comments only.
Based on the heritage of this company, we need to maintain continued increased earnings from the classic original roots earnings driver, namely the shirt division, which was the original foundation of the company. For years, we have benefited from the steady long term big profits from Van Heusen and Isard labels at J. C. Penney, which is one of our top customers in the world. Therefore, it's essential that we maintain a definitive understanding with the new management at JCPenney that PVH will not tolerate any additional new pricing strategy that in any way dilutes our profit margins.
While PVH stock did not reach triple digits as I had urged you to strive for at last year's annual meeting, PVH did go through 90 plus level. And on a technical basis, once the stock moves through 90, it's only a matter of when, not if, PVH will make a return visit to the 90 plus level and then subsequently break out to a triple digit target. Lastly, Justin Bieber has just written a new ballad and the lyrics go this way: Tommy and Calvin are on a tear and are both on track to, once and for all, knock down the Polo Man off his horse. Thanks.
Thank you for your comments and we appreciate your long time support of the company as a shareholder.
Manny, David Schilling from the Interface Center on Corporate Responsibility. We have been here before. We started engaging the company in the late 80s. So it's well over 2 decades. And the Interface Center has Catholic, Protestant, Jewish institutions that are through their pension investment programs own shares in a whole range of companies and we have started in 1971 to really promote corporate social responsibility.
For me, it's really great to be here because often when we are at shareholder meetings, we're having to urge and nudge and really file shareholder resolutions to get companies to really address the kinds of issues, Manny, that you just described in the corporate social responsible field. Here, if we look at the late '80s and we look at today, the charting of that graph is much like the growth in your brands that your human rights sort of brand, if you will, your corporate social responsibility brand has gotten better and better and better. And I know that's due to a number of things. I mean, we have internal structures. I think Bruce Claskey laid a framework of understanding about the importance of human rights to business and to the operations of the company.
I think Manny, you have taken that and integrated it into the business in an incredible way. It's not all done. You still have a job to do, right? But it's a really important thing. And I think when investors like faith based investors, socially responsible investors and others look at the internal leadership, We start with the Board and we have Rita Rodriguez, the Chair of the Corporate Responsibility Committee, Bruce Meghan, who's a part of that and of course Margaret Jenkins, who I think joined the committee last year.
That's really critical to driving and making sure that the direction of CSR is there. And then your leadership plus the team, Marcela Manubens in the human rights arena. So that I think the leadership internally is absolutely critical, but also externally. And you mentioned just briefly in a slide, one of those leadership roles, you the whole range of international non governmental organizations that have been very, very concerned around issues like fire safety in Bangladesh. If we look over the last 5 years, well over 400, 500 workers died because of lack of fire safety.
And I understand the company will be meeting with the President of Bangladesh early next week to really urge the government to take its role in enforcing the world, expectations go up along with that. And I think your infrastructure internally from the Board to management to staff as well as being very, very open to like the investors that from the Interface Center to work on reporting, to work on better understanding what social impacts are in the communities where you operate and where the factories are. So we look forward to the continued relationship. We will have maybe some differences, but I think you have within the company and externally had leadership values that other companies then we can say get on that road, join PVH in that memorandum of understanding in Bangladesh so that other companies can come to that table. So good work and especially blessings to Alan Serkin on his retirement and wish him well in the future.
Thank you, David. Appreciate your comments and also appreciate your long standing partnership with the company and to really help us to move forward in these with those initiatives. Thank you very much. Any other questions? There being no other questions, I thank everybody for their involvement here today.
The voting has concluded and I ask Michelle O'Donnell, our Assistant Secretary of the company, if she'd please come up and have and if Michelle would please read the vote.
The Inspector of Elekhan for matters considered and voted upon at the 2012 Annual Meeting of Stockholders of PVH Corp has certified to the results of the meeting. Their certification, which will be appended to the minutes of this meeting, provides in part that the annual meeting of stockholders of the company was pursuant to notice duly given. They were severally sworn to execute faithfully the duties of Inspector of Election at the meeting with strict impartiality and according to the best of their ability. They were present in person or by proxy, holders of 95% of the 70,360,188 shares of common stock and an additional 2,094,680 votes based on the number of shares of common stock into which the company's Series A convertible stock is convertible, eligible to be voted at the meeting. A quorum for all purposes was present at the meeting.
Each of Mary Baglevo, Emmanuel Chirico, Juan Figuereo, Joseph Fuller, Fred Goering, Margaret L. Jenkins, David Landau, Bruce Nagin, V. James Marino, Henry Nacella, Rita M. Rodriguez and Craig Rydon. The 12 nominees for director received a majority of the votes cast and were declared to be the duly elected directors of the company to serve for a term of 1 year.
The result of the vote to approve the amendment to the company's 2,006 stock dollars 3 $172,000,000 against $4,950,660,000,000 abstain $31,430,000,000 The proposal to approve the amendment approved the amendment, the company's 2006 stock incentive plan, having received the majority of the votes cast on such proposal was declared as duly adopted. The results of the vote to approve on an advisory basis the compensation paid to our named executive officers was for $66,785,595 against 517,000 832 abstain 38,135. The proposal to approve on advisory basis the compensation paid to our named executive officers, having received a majority of the votes cast on such proposal was declared as duly adopted. The vote on the resolution to ratify the appointment by the Board of Directors of Ernst and Young LLP Independent Auditors as auditors for the fiscal year ending February 3, 2013 was 466,000,000 £2,672,411 against 23,526. The resolution having received a majority of the votes present in person or by proxy and entitled to vote thereon was declared as duly adopted.
Thank you, Michelle. And thank you for all your hard work in setting this meeting and doing all the preparation. We really appreciate it.