So the real story and the drivers of this business are really our Calvin and Tommy business. Our Heritage businesses are really one from a cash flow point of view. They delivered strong returns on invested capital, and at the same time they really have helped us make the acquisitions of both Calvin Klein and Tommy Hilfiger.And when you think about us again, Calvin and Tommy being our growth brands. Our Heritage business is really being the part of the business that really just has helped us pay the bills. And we license a number of brands particularly with our dress shirt and neckwear business. I will get into this in more detail when I get into the presentation. Calvin, this has been a real growth story. We bought this business back in 2003. At the time the brand was only about $2.5 billion in global retail sales. We will end this year in excess of $7 billion, close to $7.3 billion. That’s a compounded top line growth rate of excess of 13%. This has been terrific acquisition for us as we’ve gone forward. And at the same time, besides the top line growing at 13%, our bottom line in this business given the licensing business that we operate and some of the wholesale and retail businesses in North America, our bottom line is growing in excess of 20% during that period of time. And this gives you a sense of the growth that we’ve seen from the $2.8 billion to the $6.7 billion, and we think there’s clearly a significant growth going forward. We target from a financial point of view 8% to 10% top line growth for the business, which over the next three to four years would layer on about $2.5 billion of global retail sales. We have been growing consistently in last three to four year closer to 13% to 14%. So the growth is being driven more internationally than domestic. We’re growing probably almost twice as fast internationally as domestic. The business breaks out today on a sales base about 50% in the U.S. – in North America and 50% outside North America. And Asia representing just under 20%, South America representing just under 10%, and Europe representing just under 20% of the business.
So just to give you flavor for how the business breaks out from a branded point of view. It is a very profitable business, about $1 billion in sales made up of a two real key components. A business that we operate, wholesale sportswear business and a retail business throughout North America that does in excess of $600 million in volume, that’s $650 million in volume and $350 million of licensing revenues and royalties, which is obviously a very profitable component. All together, our operating margins here are north of 25%, when you put it all together.So we’ve really been able to see some significant top line growth. If we can grow the top line 8% to 10%, we’re very comfortable growing the bottom line in this business closer to 15%, just the flow through based on the expense base that we had in the business. Some of our biggest license categories and partners [Monaco], principally jeans and underwear worldwide, our largest licensing partner. About 38% of our overall royalties come from [Monaco]. I’ve really seen significant growth internationally. They’ve been a great partner for us as we’ve gone forward, they’ve really worked together with us marketing the brand, positioning it internationally and their own performance has been outstanding, and we’ve benefited for that growth collecting royalties as we have gone forward in positioning the brand internationally at a very high premium position. And it really served us well. Read the rest of this transcript for free on seekingalpha.com