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Corporate Soc ialResponsibilityReport 2008

P H I L L I P S - VA N H E U S E N C O R P O R AT I O N

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C o n t e n t s

03 Message from our CEO

04 Introduction05 About this Report

06 Business Profile

06 Governance and Ethics

07 Stakeholder Engagement

09 Corporate Responsibi li ty

11 In Summary

12 Workplace

13 Associate Engagement and Retention

15 Benefits, Compensation and Associate Wellness

18 Divers ity and Inc lus ion

19 Development and Training

20 Workplace Safety20 Challenges and Goals

22 Community

23 Community Investment

24 Associate Driven Activit ies

26 Cause Related Brand Marketing

27 Partnerships

29 Challenges and Goals

30 Human Rights

31 Global Human Rights and

Social Responsibility Program

32 The PVH Supply Chain

34 Integrating A Shared Commitment

Code of Conduct

35 Susta inable Compl iance

42 Capacity Building and Education

43 Collaboration

45 Challenges and Goals

46 Environment

47 Facilities

50 Products and Packaging

53 Supply Chain Environmental Impact

55 Challenges and Goals

58 GRI Index

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Emanuel Chirico

Chairman and Chief Executive Officer

Message fromour CEO

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M E S S A G E F R O M O U R C E O 0

Dear Stakeholders:

The culture at Phillips-Van Heusen Corporation (PVH) has always embraced the concept that our performanceas a company must be measured by more than just our bottom line. At the same time, as a public company,we recognize that producing appropriate returns for our stockholders must be our first priority and thatstrong financial results give us the resources to be a solid corporate citizen.

There are compelling incentives to invest in being a good corporate citizen. Genuine commitment to corporateresponsibility builds goodwill in the communities where we live and operate. It strengthens our connectionwith our associates and makes PVH a more attractive place to work. It reduces our impact on the environment,leading to a more efficient, safe and sustainable operation. And it makes our brands and products moreappealing to our customers. All of this builds stockholder value.

At PVH , we value: Strong corporate governance and high standards of ethics and integrity Transparency and accountability with respect to our financial results, as well as our business policies

and practices A productive, diverse and satisfied workforce Responsibility to the communities where we live and conduct business Respect for human rights and fair labor conditions for the people who produce our products around the world Conscientious environmental practices to promote a sustainable, efficient operation

We believe that our long-term success is dependent upon our ability to remain true to our principles and ethicsin good times as well as in the most challenging times. Our decision in 2008 to produce our first CorporateSocial Responsibility (CSR) Report in the face of a significantly deteriorating macroeconomic environmentclearly demonstrates our commitment to our core values.

We recognize that transparency is essential in order to make progress on the challenges facing our company,our industry and the world. Issuing this report moves PVH to the next level in our CSR efforts by publiccommitting to key goals, as well as allowing us to communicate our vision, standards, accomplishmentsand challenges.

We welcome stakeholders to become more engaged, to share ideas and to express concerns. Foremostamong the stakeholders we serve are the more than 10,000 PVH associates around the world. Werealize that CSR issues are important to them and appreciate their desire to be better informed about theircompanys efforts and their desire to become more engaged in order to make a difference.

In the current difficult economic environment, it is critical that our standards are never compromised and that

we do not lose sight of what makes PVH a good corporate citizen. On the contrary, it is in these volatile anduncertain times that our values must be reinforced. With that in mind, we respectfully present our first annualCSR Report. We look forward to receiving your feedback and we will continue to use this process to identifyissues and refine our CSR policies and practices.

Emanuel ChiricoChairman and Chief Executive Officer

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Ab out this Rep ort To guide the development of this report, PVH formed a global, cross-functional task force of key associates thatidentified and prioritized the CSR topics that are most relevant to our business. To learn from the best practicesof other companies reporting efforts, we engaged Business for Social Responsibility (BSR), a non-proglobal business network and consultancy focused on sustainability, to work with us on the development ofthis report. For the past 14 years, PVH has been an active member of BSR .

I N T R O D U C T I O N

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Scope This report covers all operations performed by PVH ,as well as all operations under our direction. Theinformation in this report covers the calendar year2008 , except where noted. Since this is our firstreport, we have also included relevant historicalinformation on some of our key activities.

Data and Metrics This repor t con tai ns metrics il lustrating cer tainbaselines, quantitative goals and key performanceindicators (KPIs). However, it is clear to us that there isa need for improved data collection systems so thatwe can better measure current performance and track our progress. PVH has taken steps to address thisissue and we expect our future CSR Reports willcontain more comprehensive quantifiable data. Thereporting process also shed light on the need for bettercoordination of CSR efforts throughout the companyand for improved performance evaluation systems.

In this report, we discuss forward-looking targets andgoals. We believe that goal-setting is important and itis part of how we manage our business. However,targets and goals are based on our current businessenvironment and are subject to uncertainties of themarket. There is no assurance that all goals will beachieved.

Our reporting was influenced by the Global ReportingInitiatives (GRI) G3 Guidelines in determining relevantcontent and performance metrics to include. Pleasesee the GRI index at the end of this report.

MaterialityWe began our 2008 reporting process by conducting an assessment of the economic, socialand environmental issues that impact our business. We considered the following information: PVH s business objectives and strategies External industry benchmarking

Internal and external stakeholder dialogue and feedback PVH s current CSR disclosures

After reviewing these sources, we compiled a list of issues and priori tized them based onthe importance to PVH and our stakeholders. The areas most material to PVH fall into fcategories: Workplace Community Human Rights Environment

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I N T R O D U C T I O N06

Business ProfilePVH is one of the largest apparel companies in the world, with a history dating back more than 125 years.Our portfolio of brands includes our owned brands Calvin Klein , Van Heus en , IZOD , ARROW , G.H. Bass & Co.and Eagle . We also produce products under licensed brands Timberland , Geoffrey Beene , BCBG M ax Azria ,CHAPS , Sean John , Donald J. Trump Signature Collection , Joseph Abboud , Kenneth C ole New York , Michael Kors Collection , DKNY , Tom my Hilfiger , Nautica , Ted B aker , Ike Behar , Jones N ew York and J. Garcia , amongothers. At PVH, our various branded businesses are organized by business unit Dress Furnishings,Sportswear, Retail and Calvin Klein which takes advantage of operational and product synergies. Further, weleverage our corporate infrastructure across all of our business units to gain the greatest efficiencyand operating effectiveness. For our fiscal year 2008 (year ended February 1, 2009), our total revenues wereapproximately $2.4 billion.

Headquartered in New York City, PVH currently employs approximately 10,400 domestic associates, as well asover 600 associates spread throughout the Far East and Europe. The company operates approximately 650stores under the Van Heusen , IZOD , Bass and Calvin Klein names. The majority of our stores are located in

outlet malls throughout the United States.

Governance and EthicsBoard of DirectorsAt PVH, good corporate governance starts with ourBoard of Directors. We aim to build a board withindividuals whose characteristics strengthen ourcompanys direction-setting with diversity of input,perspectives and leadership. Our Board includesthree women and two members of minority groups.Only independent directors may serve on our boardcommittees: Audit, Compensation, PerformanceEvaluation, Corporate Social Responsibility andNominating & Governance. Nine of our 10 directorsare independent.

With public reporting comes a need for greateraccountability and oversight. Moreover, our Board

of Directors shares managements concern fortransparency and corporate responsibility.Consequently, in January 2009 , our Board establisheda new CSR Committee whose purpose is to overseethe reporting process and review future CSR reports,as well as to monitor and evaluate managementsprogress with respect to policies and strategiesthat affect PVHs role as a socially responsibleorganization.

Code of Business Conduct and EthicsBased on our belief that strong governance and ethicsare instrumental to a successful business, we recognizethat we have inherent responsibilities to ourstockholders, associates, business partners and thegeneral public. These responsibilities go beyond themere reporting of operating results and include highstandards of corporate ethics and integrity. To ensurethese standards, our Board of Directors has adopteda Code of Business Conduct and Ethics, which isbased on the following general principles of conduct:

PVH will: Maintain high moral and ethical standards that

reflect honesty, integrity and reliability in every

situation Respect the dignity and rights of all persons,regardless of race, color or creed

Properly balance the interests of all groups inthe conduct of its business

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PVHs Code of Business Conduct and Ethics covers a wide range of business practices and procedures. All of our associates, officers and directors must conduct themselves in accordance with its requirements and seekto avoid even the appearance of improper behavior. This Code is also provided to and followed by our agentsand representatives. It does not cover every issue that may arise, but it sets out basic principles to guide all of our constituencies.

Associates are introduced to the Code of Business Conduct and Ethics at our new-hire orientation PVBrand New Start program. When hired, every associate signs an acknowledgement that he or she has readand will abide by this Code. This Code is distributed annually and the acknowledgement is recertified every

two years by all associates.

Stakeholder EngagementPVH interacts with its many constituent groups in different ways. We consider our associates, investors,customers and business partners (such as suppliers, contractors, licensors and licensees), as well as thenon-governmental organizations (NGOs) and the communities in which we operate, to be our primarystakeholders. We engage these groups to ensure that we hear and incorporate their concerns and are ableto be transparent with them about our efforts and progress.

We applaud PVH for taking an important step by publishing its first Corporate Social ResponsibilitReport. The company has been a leader in promoting and monitoring human rights compliance in itssupply chain. Innovative initiatives, like the Critical Engagement and Impact Program, have helpedto build the capacity of factories to improve the lives of workers, contributing to the sustainability oftheir communities. Moving forward, we expect the company to continue its commitment to Cstrategies even in tough economic times.Rev. David M. Schilling, Program Director for Human Rights, Interfaith Center on Corporate Responsibility

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I N T R O D U C T I O N

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Ongoing CollaborationWe understand that important progress in confrontingvarious business challenges is often realized throughcollaboration with other organizations. Over theyears, we have worked with NGO s, business partnersand industry associations to achieve significantimprovements in the supply chain that could not have

been accomplished working alone. The currenteconomic crisis has heightened the need for suchcollaboration, as human and financial resourcesare increasingly limited while universal challengesare mounting.

Our Global Human Rights team regularly conductsoutreach on key business issues to NGO s concernedwith human rights such as the Fair Labor Association(FLA), the Interfaith Center on Corporate Responsibility(ICCR) and regional NGO s from around the world. We

have engaged BSR and Great Forest on environmentaltopics. For workplace diversity issues, we partner withorganizations like the Black Retail Action Group(BRAG) and INROADS . Similarly, for communityengagement, we have partnered with organizationslike the United Way, Safe Horizon and EarthShare, andengaged Changing Our World in helping us furtherdevelop our community investment strategy.

This ReportIn order to cover CSR issues that are important toour key stakeholders, we gathered input fromvarious constituency groups during the reportingprocess. This included meetings with ICCR, FLA and Great Forest.

Our associates are a critical stakeholder group. Weconducted an associate focus group to discuss CSRmatters in September 2008 , drawing participants fromacross functions in our U.S. operations. This groupprovided recommendations that contributed to ouroverall CSR strategy and communications. Oneconsistent piece of associate feedback was the needfor clear, upfront and ongoing communication ofPVH s global CSR activities. We also surveyed our PVHinterns on CSR issues. The results overwhelminglydemonstrated that a companys commitment to

social and environmental responsibility is an importantconsideration for the next generation when choosingan employer.

We appreciate that all of the stakeholders consultedgave honest and valuable input on the issues selectedfor inclusion in this report.

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WorkplaceOur long-term success depends on our capable andenthusiastic workforce. Over the years, PVH hasenjoyed relatively low associate turnover rates and along-tenured workforce. To build on our successes inassociate engagement and retention, we are focusedon promoting diversity, work/life balance, career

development and training, and workplace safety. PVHprovides associates with a competitive compensationpackage and a comprehensive benefits program.In addition to standard health insurance and retirementplans, some examples of company benefits are anemployee assistance program, tuition reimbursementand college scholarship programs, adoption benefitsand assistance with personal health concerns such asweight-loss and smoking cessation.

CommunityCommunity stewardship is an important aspect of PVHs corporate identity and culture. Our efforts toinvolve ourselves with our communities occur onmany fronts and at all levels. Associates, from seniormanagement to hourly workers, are active with local,national and foreign organizations that support

hundreds of worthy causes, offering time, enthusiasmand energy, as well as personal and companyresources. Our community engagement activitiesinclude company-wide initiatives, direct communityinvolvement by business units and grass-rootsparticipation by individual associates. Although theseefforts can be effective, we see a need for a morecohesive corporate focus and message with regard toour community and philanthropic activities. We arecurrently working to concentrate our communitystewardship efforts in order to have a more significant

impact on issues that are important to our associatesand the communities in which we operate.

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Corporate ResponsibilityWe are guided by the principle that success in business is dependent on putting people first. Indeed, we know

that our company would not have grown as it has if we were not committed to making a genuine contributionto improving the quality of life and upholding the basic rights of our associates, their families and thecommunities in which we operate.

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I N T R O D U C T I O N

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Human RightsBy the early 1990 s, PVH , along with virtually the entireapparel industry, was transitioning from a NorthAmerican manufacturing operation to a global sourcingplatform a change that tested our commitment to

fair labor practices and human rights. At the time, theprevailing attitude in the industry was that factoryowners were responsible for any human and laborrights violations related to their workforce.

Early in this period, PVH took some of the first stepsto ensure the protection of human rights and fairworking conditions in our supply chain. We took thesesteps because they were in line with the companysprinciples and because it was important to protectbrand reputation. Our initial human rights code of

conduct for suppliers, contractors and businesspartners was developed in 1991 .

During the 1990 s, PVH operated several company-owned manufacturing facilities in Central America. Thecompany faced significant criticism from variousactivists and interest groups about the conditions at

these factories. We listened to our critics and did ourbest to integrate their suggestions into our developingGlobal Human Rights program. Our experience withthese facilities was an important factor in formulatingand shaping our approach to workers rights issues.We continue to operate under the belief that treatingpeople fairly and with respect is paramount in creatingand maintaining a successful business and, as aresult, our Global Human Rights program hasbecome an integral component of all sourcing andmanufacturing decisions.

EnvironmentPVH is also committed to the execution of a responsible environmental strategy. Although there have beenprograms put into practice by our individual business units to confront environmental issues, it has only beenover approximately the last year that we have begun to address these concerns with company-wide efforts.PVH established an environmental task force in 2007 , inviting interested associates throughout the company toget involved. This task forces recommendations resulted in the following initiatives:

We partnered with the environmental consulting firm Great Forest to conduct a detailed environmental

assessment of our three largest U.S. corporate/administrative offices We established working groups at each office to review and implement the recommendations arising

from the assessment We held meetings with landlords, product and service vendors, and other groups to establish initiatives and

collect data

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Management of CSR at PVHPVH s commitment to CSR can be seen throughout the company, starting at the top. The internal managementof CSR has direct ties to our CEO , ensuring that CSR efforts are linked to all parts of our business. The GlobalHuman Rights & Social Responsibility Department is responsible for protection of human rights and fair laborconditions in our supply chain. Responsibility for environmental issues is divided into three functional areas:

facilities are managed by Human Resources and Office Services; transportation and distribution aremanaged by Logistics; and supply chain environmental issues are managed by the Global Human Rights& Social Responsibility Department. Workplace issues are managed by Human Resources and communityengagement is managed by the PVH Foundation for contributions and across business units for associate-related activities. The CSR Task Force will continue to manage the annual CSR report process and will monitorprogress and performance related to PVH s CSR efforts.

In Sum m aryPVH has spent considerable time and utilized theefforts of multiple internal and external stakeholders toensure that we continue to strive to maintain theprinciples of good corporate citizenship. As acompany, we are moving towards a centralized, morecohesive strategic approach to CSR . We see thisreport as a major step toward increasing transparencyand accountability to the public so that we may shareour successes and open the door for our internaland external stakeholders to offer new ideas andconstructive criticism.

The years ahead will be uniquely challenging asbusinesses and governments struggle to overcomethe effects of the current global economic crisis.We recognize that in a world of increasingly constrainedresources (both financial and natural) there are limits towhat can be accomplished by one corporation. Morethan ever, there is a need for organizations to collaborateto find solutions to our shared challenges. We pledgeto not only pursue our business in a responsible fashion,but also to engage our associates, NGO s, customerinvestors, vendors and other stakeholders around the

world as part of that commitment.

We welcome all questions, comments and concerns.Please contact us at cs r r ep or t @pvh .co m .

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WorkplaceAt PVH, we recognize that talented and dedicatedassociates are most important to the strength andstability of the company. We believe in a healthywork/life balance for our associates. We also valuediversity in our w orkforce , respec t the uniqueness o feach associate and encourage openness of ideas

and c omm unication.

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LOCATION PVH TURNOVER BENCHMA

Corporate offices, Warehouses and 18.4%Far East Operations

Retail Stores (Full- time Positions) 42.8%

Retail Stores (Part- time Positions) 122.3%

1 United States Department of Labor, Bureau of Labor Statistics,2008Turnover Date for Wholesale Trade sector2 Mercer/National Retail Federation,2008Compensation and Benefits Survey for Retail Companies

Assoc iate Engagem ent and Retention Associate engagement and retention are two key metrics for gauging our workplace performance and PVHa strong record in both of these areas providing a stable foundation for continued growth of the organization.

Historically, PVH has had relatively low turnover rates and a long-tenured workforce, with the averageassociate staying for seven years of service, excluding retail and warehouse associates. Though rates differat our various locations worldwide, our average annual turnover rates as compared to industry measures areas follows:

In 2008 , as we closed stores, we were able to retain a number of full-time retail associates by transferringthem to our remaining stores. The turnover rate for part-time positions in our retail stores was higher in 2(98% in 2007) due to the store closings and related reduction in payroll hours. Part-time retail positionsgenerally tend to have higher turnover rates because they are more seasonally affected and are often filledby a more transient population.

Our traditionally low turnover and high tenure rates are indicative of the many positive factors that contributeto associate engagement at PVH . These factors were identified in our first company-wide associate survey,conducted in October 2006 by the National Business Research Institute. The survey had an 85% response ratewhich is well above average for associate surveys. PVH scored in the 71 st percentile in overall associateengagement, 21 percentiles above the national average for our industry.

Among the highest-rated associate engagement categories were: Job satisfaction Management style and vision Company image Compensation and benefits programs

Associates also identified opportunit ies for organizational improvement. In particular, two areas emerged: Communication Associates indicated a desire to be better informed about current developments in the

company and requested more communications related to goals and plans at both the organizational andthe supervisory levels.

Career development Associates also indicated the need for more information about career developmentissues, advancement and promotions.

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In addition to improvements at the corporate level,

each PVH business unit or department developed andimplemented action plans to address their own surveyresults. These plans included initiating periodicbusiness unit meetings so associates could hearabout the latest business developments, assessingand improving the physical work space of associates,and other actions that address individual businessunit needs.

PVH plans to conduct another company-wideassociate survey in 2009 . Given the business climate

and economic conditions that challenge our business,we are interested in getting feedback from associatesabout their current issues and concerns so thatwe may be responsive to their needs and takeappropriate actions.

Other plans for associate engagement and retention in

2009 include developing more consistent turnoverreporting across business units and creating a morecomprehensive exit interview and reporting process toidentify retention issues. In addition, we will continueto provide a high level of human resources supportto managers and associates to maintain strongassociate relations and ensure effective associateproblem resolution, as well as continue to provide thehigh quality of life that PVH associates enjoy.

TOPIC ACTIONS

Communication State of the Business meetings:Our senior management team, led by Chairman andCEOManny Chirico,conducts a series of annual meetings with associates to inform them of business performance, updated brandinformation, and the companys strategic plans. The meetings include question-and-answer periods.DVDs areprovided to associate groups that are not able to attend.

Enhancements toThe Thread (company intranet site):Initially, we expanded our intranet site to include newcontent like quarterly earnings reports and associated audio content. In late2008 /e ar ly2009, we conducteda major site redesign to promote engaging, real time communication and collaboration. The update also includednew features like an enhanced associate directory, brand news updates, real time news feeds and a functionalsearch feature. Additional ongoing enhancements are planned to maximize communications onThe Thread .

Communications seminars:We created and im plemented associate and m anager versions of variouscommunication skills seminars.

Career Development Awareness PVHCareer Center:To improve associates knowledge about career paths and opportunities w ithinPVH, w elaunched an online Career Center that includes career path charts for major business functions, job descriptions,self-assessment tools, and suggested development plans. We will expand and update this site to include additionaldepartments not currently included and to reflect updated career paths.

Open position emails:In addition to posting all open positions onThe Thread , we regularly email Career Centerupdates to our associates about the most recent job postings available.

Career development workshops:Our newly designed and implemented seminars for managers and associateshave become part of the companys regular curriculum.

As a result of the survey, we formed associate action teams, with representatives from across the organization,to review the results and make recommendations to senior management. Based on those recommendations,we have taken the following key actions:

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Benefits, Compensation and Associate WellnessOur success is dependent upon hardworking associates who dedicate their time and talents to makingour company strong. That is why we provide competitive salaries and one of the most comprehensive benefitprograms in the retail and apparel industries.

At PVH , we benchmark our total compensationprogram, including salary ranges, against survey datain our industry to ensure that we remain competitive.

Additionally, we provide certain levels of associateswith the ability to participate in bonus and equityprograms so that they may share in the growth andsuccess of the company.

In the United States, PVH provides both a 401 (k) plan

(with a company match) and the security of a definedbenefit pension plan, funded by PVH , for associateswho work more than 20 hours per week. In addition,for those who work more than 32 hours per week,PVH provides a comprehensive health care program,including medical and dental coverage, life insuranceand disability income benefits. PVH health carebenefits are available to all full-time associates andtheir families, including domestic partners, of same oropposite sex.

For 2009 , we will be adding the Health Advocateservice to our suite of benefits to assist associates inlocating qualified healthcare providers, schedulingappointments, resolving insurance claims and billingissues, and getting access to other related services.

To help our associates balance work and family, weoffer a child care/elder care resource and referralservice, an employee assistance program, adoption

benefits and several education-related benefits,including a college scholarship program for associateschildren, college coaching services and tuitionassistance for associates. In our corporate andadministrative offices, we offer flextime and a summerhours program.

Over the past two years, we also have worked toprovide our associates with the tools to make healtha priority through our state-of-the-art wellnessprogram, HealthMatters. The PVH HealthMatte

program offers rewards and incentives for walking andexercising, staying or becoming tobacco-free andmaking other healthy choices. In addition, associateshave access to a personal health coach who candevelop an exercise program, put together acustomized diet plan and work with them to quitsmoking. According to our associates, the programhas been a great success.

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W O R K P L A C E16

Associate SupportOur commitment to supporting our associates

includes lending a helping hand in times of need.There are many examples of volunteer activi ties andfinancial assistance for co-workers that demonstratethe generous and caring spirit of PVH associates,a shared responsibility that is at the heart of ourcompanys culture of caring.

In natural disasters, house fires, medical crises and

other emergencies, affected associates have beenappreciative of the speed and ease with which we areable to respond and give moral and financial support.

This support for our associates reinforces the bondsthat make our PVH corporate family strong.

HealthMatters Testimonial

Frank DeCicco , Deductions Analyst

Bridgewater, N ew Jersey

Because of the PVH HealthMatters program madeavailable to each of us through the thoughtfulness of PVH, I am much more health-conscious than I have everbeen before.

One morning in February of 2007 , I woke up disgusted with my weight so I joinedWeightWatchers here at work and decided to get involved with the walking program.I received my PVH pedometer and began walking at least 10,000 steps per day. At first,10,000 steps every day seemed like sooooo many steps but once I started doing it

consistently, it became easy. Now there are days that, in addition to walking the 10,000 steps,I get on my bicycle and ride. I am able to make time to walk because it has become a priorityin my life.

Using a combination of WeightWatchers and the walking program, I lost over 30 poundsthrough the spring of 2008 All of this was inspired by the PVH HealthMatters program.

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W O R K P L A C E 17

At PVH , we are committed to helpingour own team of associates when theirindividual lives are impacted by crises.Here is one example, told by:

Diane Nagy, Custo mer Service Man ager, Retail

Bridgew ater, New Jersey

It was one of those days that I will always remember. After just getting out of a staff meeting,the call from my husband was, you need to come home now the house is on fire. I madeit home to find the fire department making their last walk through the house. What I had wornto work that day, and a few leftover articles of clothing in the dryer, was all that I had left ofany clothing or personal items. The wonderful thing no one was hurt or harmed by the fire.Even the cat made it out safely.

The very next morning, one of our PVH executives was on the phone asking me how PVHcould help and what we needed. Later that day, I received another phone call, this time frommy supervisor who told me to visit our stores in one of our centers and get what we needed.

Aside from PVH managements help, my co-workers also took up a collection to help uswith our unexpected expenses, on top of taking care of business while I was out of the office.

The Van Heusen Retail division did an equally amazing thing that helped to bring somenormalcy back into my familys life. Upon my return to work, I was told that twice a weekthey would be providing me with a home cooked meal. At that point we had been eating fastfood and running all over the place, so a nice home cooked meal in our temporary living

trailer was so wonderful! This went on for an amazing two months and was so very touchingand much appreciated.

The generosity and thoughtfulness of all my PVH co-workers in my time of need wasoverwhelming and very emotional. My family and I are truly blessed to know and be associatedwith these wonderful people who really made a difference and helped us through ourdifficult time.

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Diversity and Inc lus ionAt PVH , we recognize and respect the uniqueness of each individual and we believe that a diverse workforceis essential in responding to consumers needs and to the competitive demands of the global marketplace.PVH has a growing international presence and we strive to maintain a global perspective and an appreciation

of world cultures. We also value the diversity of ideas and encourage open communication that leads to moreeffective and innovative business strategies and problem solving.

We are committed to recruiting, training and providing career advancement opportunities to all associateswithout regard to race, gender, religion, age, national origin, citizenship status, disability, qualified veteranstatus, marital status or sexual or ientation. PVH is an affirmative-action employer and we support the hiring andpromotion of women and minorities in the workforce.

2008 WORKFORCE GENDER

Male31 %

Female69 %

2008 WORKFORCE ETHNICITY

White65 %

Other1%

Black/African American10 %

Asian5%

Hispanic19 %

GENDER NUMBER %

Fema le 7730 69Ma le 3471 31

RACE/ETHNICITY NUMBER %

White 7275 65. 0Hispanic 2163 19 .3Black/African American 1116 10.0

Asian 584 5.2Other 63 0.5

W O R K P L A C E

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PVH maintains longstanding partnerships with organizations like the Black Retail Action Group (BRAG) andINROADS , organizations that help place racially and ethnically diverse interns with North American corporations,to promote the hiring and career development of minority candidates through PVH internships and regularemployment.

Common Threads was the theme of the 38 th AnnualScholarship and Awards Gala for BRAG . In the picture

on the left on page 19 are PVH staff and variousBRAG interns from this past year and from previousyears, some of whom have joined PVH in regularfull-time positions.

In 2009 , we plan to improve communication of ourdiversity initiatives, including our ongoing partnerships

and work with minority and women-owned businesses.We also plan to improve internal reporting to seniormanagement to better highlight both successesand opportunities to maximize diversity throughoutthe organization. Additionally, we will continue to offerdiversity training programs as part of our basictraining curriculum.

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De velop m ent a nd TrainingContinuous education and development of the PVH workforce is critically important to the growth and successof our organization.

While training varies across our locations based on specific needs, we offer a wide variety of associatetraining and development opportunities that help associates perform more effectively in their current roles andprepare them for taking on additional responsibilities in the future. These opportunities include:

General business skills seminars focusing on financial, communications and other managerial skills New-hire orientation programs Management training programs Retail skills and operations training Warehouse and distribution skills training Computer training classes covering the latest software technology Diversity and legal compliance training programs to support the values of our respectful workplace

Customized classes to meet the needs of individual department teams Lunch and Learn programs on personal life issues like Taking Care of Elderly Parents,

How to Create a Living Will, and Identity Theft

In 2008 , we made a major investment in an online talent management system to help with succession planning,performance management and salary planning. This system offers features such as:

Associate career profiles (with resume-like data) to capture basic associate career informationincluding work history, education, certifications, and more

Salary planning that includes merit planning worksheets, individual compensation statementsand other tools

Succession planning tools to identify and manage bench strength

Over the next two years, PVH will continue to roll out additional elements of the talent management system,including tools to support performance management and productivity, such as online goal setting and tracking,and individual development planning. We will also implement leadership assessment and succession planningprograms to ensure development of future leaders of PVH .

In addition to internal training and development opportunities, we also provide a generous college tuition assistanceprogram to associates who want to earn an undergraduate or graduate college degree in a related field.

W O R K P L A C E

1

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W O R K P L A C E

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Workplace SafetyAt PVH , we take associate safety seriously. We have

developed custom safety programs tailored to each of our warehouse and factory locations. At our retailstores, we have implemented strong safety policiesand procedures, mandatory safety training and storeself-inspections. The Risk Management Departmenthelps develop these programs and provides guidanceand resources with services such as inspections,ergonomic analysis and proper lifting techniquetraining. To motivate our managers to promote safety,we allocate workers compensation losses andassociated costs to each business units budget. We

support business unit heads by providing quarterlyloss information, so that they can direct their effortsto issues in a timely manner. While we realize thatit would be unrealistic to expect a perfect safetyrecord with no incidents, we continuously strive toprovide the safest possible working environment forall our associates.

Challenges and Goals This past year has presented our company, our industry

and our country with many significant challenges.We believe that the global economy will continue to bedifficult throughout 2009 . It was necessary for us torespond aggressively to these challenges and,accordingly, during 2008 a number of restructuringactivities were initiated, including the closing of ourGeoffrey Beene outlet retail store division, theshutdown of domestic production of machine-madeneckwear a realignment of our global sourcingorganization, and reductions in warehousing capacity,as well as other initiatives to reduce travel, payroll,

marketing and administrative expenses.

With these actions came a number of very difficultdecisions that resulted in staff reductions throughoutthe organization. Approximately 250 salaried positions,representing over 10% of the companys salariedworkforce, and approximately 150 hourly neckwearmanufacturing positions have been eliminated. TheGeoffrey Beene store closings resulted in the eliminationof approximately 450 full-time and part-time retailpositions. PVH attempted to treat all impacted

associates with the highest level of dignity andrespect. We provided these associates with generousseverance packages, family medical benefits andoutplacement services to support them in securingnew employment.

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W O R K P L A C E

2

During these difficult economic times, communication with associates is increasingly important. We will make

a greater effort in 2009 to maintain timely and ongoing communications with associates, including morefrequent communications from our CEO and senior management team, in a variety of formats to reachassociates in all parts of our decentralized organization. Additionally, we will establish a new position,Director of Global Communications, to improve communications throughout the company. This positionwill be responsible for ensuring that all PVH associates have timely access to information about currentdevelopments at PVH through a variety of approaches. Methods will include creating and maintainingengaging content on the companys intranet site, publishing associate communications on brand strategiesand initiatives, and implementing a year-round communications program using various electronic, media andmeeting formats.

Below are some of our goals for continuous improvement of workplace issues in 2009 :

Engagement and Retention Conduct the2009associate engagement survey to assess organizational effectiveness and develoand department- level action plans to address any identified areas of opportunity

Achieve more consistent tracking and reporting of associate engagement measures such as tuinterviews across all business units. Publish periodic reports highlighting any identified issue

Diversity Expand comm unication and awareness of com pany diversity strategies and initiatives Expand reporting of diversity statistics for review by senior m anagement and identify opportu

Development and Training Implement leadership assessment and d evelopment programs to develop leadership talent Expand the onlinePVHTalent Management System to provide managers and associates with enha

succession planning and career development, performance management and salary planning Implement a new Change Management seminar as part of our expanding management and lea

training curriculum to h elp managers lead more effectively in light of the rapidly changing bAssociate Communications Create an ongoing communications plan to keep associates informed and m aintain effective t

Corporate Social Responsibility Incorporate reporting ofCSRactivities into thePVHperformance review process for senior executives tObjectives goal setting and performance evaluation on social responsibility issues

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C o m m un it y

At PVH, our commitment to communi ty service i s anintegral aspect of our corporate identi ty and culture.We believe that we have an obligation to support thelocal communi t ies in which we l ive and opera te , asw ell as the larger glob al c om m unity. At the heart of ourco m m uni ty eng agem ent in it ia t ives are o ur assoc ia tes .

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C O M M U N I T Y 2

2008

COMMUNITY INVESTMENTS Dollar amounts in thousands1

PVH Product ContributionsRetail Customer Contributions

PVH Cash ContributionsPVH Cares

Cause Related Marketing

1 PVH Product Contributions represent retail value.

2007

Total$9,812

Total$10,578

$1,821

$500

$409

$434

$6,648

$6,363

$1,816

$1,370

$568

$461

Whether in our retail stores, warehouses or office facilities, our various business units dedicate themselvesto specific causes and organizations where associates participate as a team on focused activities and events.Individual associates from senior executives to hourly associates serve personally on not-for-profit boards,fundraising committees and in a variety of other volunteer capacities for a broad range of worthy causes.Our community stewardship is done in a number of ways and through numerous channels. These include:

Associate volunteerism In-kind donations of PVH branded products Cash contributions made at the corporate and local level Associate contributions and PVH matching gift programs Associate fundraising activities and events Cause related brand marketing programs Encouraging consumer giving in our retail stores

C om m unity Investm ent

Product ContributionsWe contribute a variety of products to organizationsthat assist individuals and families in need. Clothingand accessories, such as coats, shirts, pants, shoesand handbags, are given to relief organizations duringnatural disasters, as well as to organizations that aid

homeless or low-income families, women and childrenwho must flee their homes because of domesticabuse, homeless veterans and many others. Donateditems come from our product samples, out of seasonitems and other sources from our wholesale andretail businesses. PVH made in-kind productcontributions of more than $6 million both in 2007and in 2008 .

Product contributions can make a big difference itimes of need. Through the work of PVH associawho organize our product donation efforts and thecontributions of our branded products, we havetouched countless lives by providing some of life

basic necessities when individuals and familineeded them the most.

Cash ContributionsPVH contributes to a wide variety of global, nationand local organizations in the communities around thworld where we do business. Community investmenincludes funding to support disadvantaged womenand children, education, the environment, disasterelief and a number of other causes.

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C O M M U N I T Y 24

Associate Driven Activities

PVH Cares CampaignPVH associates in the United States contribute to a wide range of causes through our PVH Cares campaign.We encourage and support our associates efforts to make a difference in their communities. Whether the focus

is health, education, children and family issues, the environment or other spotlight issues, PVH associates givegenerously through the PVH Cares campaign and the company matches 50 cents on every dollar contributedby associates. We work with the United Way to conduct an annual fundraising campaign through whichassociates contribute by cash contribution or through payroll deduction directly to the United Way and itsmember agencies or to designated charities of their choice.

As part of the PVH Cares campaign, PVH associates also plan and conduct fundraising events in our variouslocations to raise additional funds for selected charities. Popular events include ice cream sales, golf outings,craft sales by special education schools, sample sales to benefit charity and many others. Year after year, ourassociates inspire and amaze us with how enthusiastically they take advantage of these programs to supporttheir communities.

The chart below shows the amounts raised through the PVH Cares campaign for the past two years:

DOLLAR AMOUNTS IN THOUSANDS

2007 2008

Associate Pledges $ 203 $209

PVH Match 115 114

Fundraising Events 116 138

Total $ 434 $461

J onesville Team Rallies Support for Associate Larry Kincaid and ALS

Larry Kincaid, an associate in our Jonesville, North Carolina warehouse, was diagnosed with ALS (LouGehrigs disease) in 2007 . Following his diagnosis, Larry made the courageous act of inviting his fellowassociates at PVH to join the effort to cure ALS. When the PVH Foundation presented a $10,000contribution to the ALS Association in Larrys honor, he asked his Jonesville co-workers to match it.

Larrys actions unified the Jonesville team in an inspiring fundraising campaign. Through bake sales, golf tournaments, yard sales, raffles and other events, 62 associates from the Jonesville team, along withfriends and family, almost tripled their goal and raised $29,145 . They also raised money for a gala eventand many people volunteered their time to prepare for and stage the event. Associate contributions werepresented in a moving ceremony at the event, which raised more than $225,000 overall for ALS research.

Last year, the Western District of North Carolina selected Larry as the years Honoree of Hope, and hegave an emotional speech at a banquet for ALS research. Larry embodies the PVH spirit of voluntarism,a profile in community service at PVH in action.

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C O M M U N I T Y 2

Cyclone Disaster Relief PVH associates set up fundraising campaigns in our Bangladesh and Hong Kong offices to assist familieswho lost their homes and were affected by the widespread flooding caused by the cyclone in Bangladesh.We used contributions collected from the Bangladesh office to buy and distribute blankets directly to theneedy and we gave contributions from the Hong Kong office to World Vision Hong Kong, an organizationthat works to help children, families and communities living in poverty and strongly supports emergencyrelief efforts in affected countries.

Associate VolunteeringPVH associates give of their time and talent tosupport the communities where they live and work.Below are a few examples of associate volunteerinitiatives across our U.S. business units:

The Dress Furnishings Group ran a drive to gathergoods for earthquake relief in El Salvador.

The Calvin Klein team supported Woodycrest Housein the Bronx, New York, giving toys to children of 40families affected by HIV/AIDS.

Our Bridgewater, New Jersey office associatesprovided support to the Community Food Bank ofNew Jersey by collecting, sorting and distributingfood and childrens clothing to local organizationsand families.

In addition to company promoted fundraising driveand community events, PVH associates get involvdirectly in numerous volunteer service opportunitiaround the world. Additionally, associates in ou

corporate and administrative offices are encouragedto perform volunteer service through our Paid TimOff Volunteer Policy. This program allows associatto spend up to 48 hours per year performicommunity service during working hours whcontinuing to be paid by the company. Establishedmany years ago to promote community involvementhis program has led to thousands of hours ovolunteer service by our associates.

Our overseas associates also demonstrate the PVH spirit of community responsibility. Examples of volunteservice by associates in our foreign operations divisions include:

Our Bangladesh associates organized an Eye Camp to provide free eye examinations to local residents Our Hong Kong office associates staged an annual Dress Special Day to help donate apparel to families

in need Donations of computers were made to schools, libraries and villages in Bangladesh, Indonesia and the Philippines Our Honduras office held a Christmas party for the children of El Refugio orphanage

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Customer ContributionsWe reach out to our retail customers every July through an annual all-store customer campaign. For the pastthree years, our retail outlet stores have solicited customer contributions to support Save the Children, anorganization focused on creating lasting change in the lives of children through literacy, nutrition and physicalactivity programs. Associates in our retail outlet stores also conduct related in-store customer campaigns,such as food drives and toy drives. The table below shows the amounts raised for the past two years fromcustomer generosity during our in-store campaigns:

PVH strategically engages in cause related brandmarketing when we feel that the objective is in linewith our corporate values.

Save Ellis IslandWe were involved over the past two years, in thename of our ARROW brand, with the effort to raiseawareness and funds for Save Ellis Island, a non-profitorganization dedicated to the rescue and reuse of thedeteriorated buildings on the south side of New YorksEllis Island, part of the Statue of Liberty NationalMonument. The ARROW brand strives to deliver asense of the American spirit and lifestyle by reflectingthe vitality and optimism that is the Americanexperience. The long history and traditional Americanstyle of the brand is linked with our corporatecommitment to preserving the unique and importantpart of American history represented by Ellis Island.

ARROW s Save Ellis Islandcampaign features the storiesof celebrities and everyday

Am er ican s who li nk thei rfamily history back throughEllis Island. The campaignsuser-genera ted webs i tew w w. w e a r e l l i s i s l a n d . o rg

offers visitors the opportunityto read and watch thesestories of hope and inspirationand to post their own family

stories and photos. The site also provides links formaking contributions to the cause.

The media investment to support the campaign wasapproximately $15 million and included television,cinema, in-flight, print and outdoor marketing. Inaddition, during 2007 and 2008 , PVH contributed atotal of $1 million to the Save Ellis Island campaign.Our initial $500,000 contribution helped to completethe restoration of the Ferry Building, which wasreopened to the public on April 2, 2007 .

Friends of the High Line2008 marked the 40 th anniversary of the Calvin Klein brand. To celebrate the occasion, we hosted anevent to recognize the milestone and to contributeto the future operations of the High Line, the mosteagerly anticipated public space to open in New York City in decades.

Friends of the High Line (FHL)is a non-profit organizationdedicated to the preservation and reuse of the HighLine, a 1.45 -mile-long historic elevated rail structureon the West Side of Manhattan. The space is beingtransformed into a one-of-a-kind, 6.7 acre publicpromenade that can be freely enjoyed by all. Foundedin 1999 , FHL is supported by elected officials,numerous civic organizations and thousands of preservationists, open-space advocates, designprofessionals and civic-minded individuals andbusinesses from New York and across the U.S. Wecontributed $870,000 to FHL.

Cause Related Brand Marketing

DOLLAR AM OUNTS IN THOUSANDS

2007 2008

Total $409 $568

C O M M U N I T Y 26

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Safe Horizon helped PVH launch the SafeWork education awareness program for associates in the various PVHdepartments that may have to deal with domestic violence issues in the workplace, such as Human Resources,Security, Office Services and Retail Store Management. This initiative led to the launch of a company-wideDomestic Violence Awareness program across all of our domestic facilities. The program provides associateswith access to life-saving resources for those who might be in need of such support services.

EarthShareWe have maintained a longstanding partnershipwith EarthShare, a national organization that allowsworking people to support hundreds of environmentalgroups through workplace payroll contributioncampaigns, in connection with our PVH CaresCampaign. We have furthered our relationship bypartnering with EarthShare, through its localorganizations in New Jersey and New York, toobtain valuable input on our 2008 corporate officeenvironmental initiatives, including recommendationson overall strategy, research on recommended

environmental practices and referrals to externalresources. The education, advice and support wereceived from EarthShare has been invaluable as wecontinue to develop our long-term environmentalstrategy and related action plans.

PVH has served as primary sponsor of severalsignature EarthShare events such as EarthShareCelebrates New Jersey, the Central Park ZooEnvironmental Event and Operation Sail New York City.

United WayOne of our most important community investment partnerships is our relationship with the United Way,a national network of more than 1,300 locally governed organizations that is recognized as a leader in advancingthe common good by focusing on education, financial stability and health for individuals and families.We partnered with the Somerset County United Way (New Jersey), which was instrumental in developing theconcept for the annual PVH Cares fundraising strategy. Through this partnership, associates contribute directly

to the United Way and these funds are either provided to United Way member agencies or, alternatively, toindividual charities of the associates choice. Either way, the donation process is simplified by the United Wayscentral processing of contributions.

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The United Way has also provided expert advice and support to our company on a variety of community serviceissues over the years, serving as an excellent resource on issues affecting our workforce and the communitiesin which we operate. Our partnership with the United Way is an excellent example of how PVH works togetherwith leading community organizations in ways that benefit our company, our associates and our communities.

Challenges and GoalsIn 2008, we recognized that while PVH has very active philanthropic and community involvement programs in place,we could benefit from a more cohesive and comprehensive strategy that clearly defines our goalsand makes them consistent with our corporate culture and our global business objectives. To accomplish this,PVH has enlisted an internal team of associates from various parts of the company to work with an outsideconsulting firm, Changing Our World, on a comprehensive assessment of our community stewardship andinvestment activities.

Our aim is to develop a long-term strategy that maintains locally relevant community relations whilemaximizing the impact of our community efforts as a whole. We intend to bring this tighter focus and efficiencyto the programmatic and operational aspects of our community activities by identifying, on a corporate basis,the core focus areas for our philanthropic support. Although this unified and focused approach will be establishedcompany-wide, we will seek to preserve as best as we can the grass-roots efforts developed over the years byour associates at our various facilities and business units.

We pledge to maintain our strong commitment to community service despite the current difficult economy and wewill work to ensure that our monetary contributions reflect economic realities and our fiscal responsibilities. It isour intention that our new community stewardship strategy will better enable us to help the communities where

we live and work to weather these turbulent times.

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Human Rights

PVH has a long history of addressing human rights andlabor conditions with our suppliers, beginning in the early1990 s with our A Shared Commitment code of conductfor suppliers, contractors and business partners.

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H U M A N R I G H T S

3

Global Human Rights and Social Responsibility ProgFrom the inception of our Global Human Rights andSocial Responsibility program, we aligned our valueswith internationally recognized principles such as the

United Nations Universal Declaration of HumanRights and the International Labor OrganizationsCore Conventions. Our compliance policy requiresthe pre-assessment and authorization of any factoryintended for PVH production. Our Global HumanRights and Social Responsibility Departmentcontinuously works on improving practices withbusiness partners throughout the supply chain.

We have an in-house team dedicated to thedevelopment, implementation and management of

all human rights and labor compliance issues, aswell as related education programs. The GlobalHuman Rights and Social Responsibility Departmentcollaborates with our Global Sourcing Department,

while operating independently of sourcing decisionmaking. These close relationships contribute to ourstrong, integrated efforts in human rights protection and

labor compliance.

Our Global Human Rights and Social ResponsibilityDepartment is headquartered in New York andoperates regional offices in Bangladesh, China,Honduras, Hong Kong and India. The department iscurrently composed of 21 full-time and 12 part-tiassociates. Department associates work to identifynon-compliance issues at the factories we utilize tomanufacture products under our owned and licensedbrands and to engage factory management in root

cause analysis, capacity building efforts andremediation. The department also proposes and runspilot programs for endemic regional issues, such asexcessive work hours in China.

Our Terminology

Capacity building refers to assistance or training provided to factories which have a need to developcertain skills or competencies, or for general upgrading of performance ability.

Corrective Action Plan (CAP) is the plan a factory develops to correct non-compliance issues. The planmust address root causes and detail how and when the factory intends to correct issues.

CEIP is our Critical Engagement and Impact Program. CEIP is an innovative beyond monitoring approachthat focuses on bringing continuous, long-term improvements to a facility by addressing root causesand strengthening the social and environmental components of the internal control system. It isintended to ensure compliance with labor and environmental laws and human rights standards.

Root Cause Analysis (RCA) is a problem solving method aimed at identifying the underlying issues.RCA is viewed as a tool of continuous improvement. By directing corrective measures at root causes,the likelihood of problem recurrence will be minimized.

Remediation is a process during which PVH works with a factory to correct labor and human rights

problems and to prevent their recurrence.Retrenchment is the downsizing or closure of a business due to bona fide economic, technological,structural or similar reasons.

Zero tolerance issues are problems of a critical nature that would cause us to refuse to work with aparticular supplier or to terminate an existing relationship due to an egregious breach of ourA Shared Commitment code of conduct. The use of child labor is an example of a zero tolerance issue.

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Working with Internal PartnersThe Global Human Rights and Social ResponsibilityDepartment holds meetings to educate PVHs sourcingassociates on human rights policies, provide guidancerelative to human rights and labor compliance onsourcing decisions and help create sustainable

solutions for specific human and labor rightschallenges in a given region. As part of this effort,our sourcing associates are informed of factory auditfindings and the two teams discuss all non-complianceissues. This approach enables our sourcing executivesto incorporate these concerns into their businessdecisions.

Evaluating the Effectiveness of Our GlobalHuman Rights and Social Responsibility ProgramWe assess the effectiveness of our program by

measuring the impact it has on our corporateculture, as indicated by our associates awareness,the extent to which human and labor rights concernsare incorporated into business decisions and thetimely communication of sourcing challenges to our

human rights team. Furthermore, we evaluate theprograms effectiveness by looking at our suppliersdevelopment of their own compliance systems, workerseducation on code requirements, non-complianceincidences, the undertaking of factory remediation bynon-compliant facilities and the time it takes to bringfactories into compliance. Finally, the Fair Labor

Associations (FLA) annual evaluation process of ourcompliance program provides valuable insight into theDepartments performance and highlights areas inneed of improvement.

H U M A N R I G H T S

32

The PVH S upp ly ChainPVH SuppliersWe source and purchase substantially all of the products sold by our wholesale and retail businesses. Suppliersof these products must agree to our A Shared Commitment code of conduct requirements, disclose all factoriesintended for our production, undergo compliance assessments by our Global Human Rights and Social ResponsibilityDepartment and, most importantly, remediate all non-compliant conditions uncovered by the assessments.

FIELD STAFF

HUMAN RIGHTS APPROVAL COMMITTEE Solely responsible for decision-making on the compliance status of

every factory that has undergone evaluation In order to eliminate conflicts of interest, executive members decide

on the status for factories outside of their core roles

TRAINING COMMITTEEDevelops tools for the training and education of our hum an rights team,factory management, factory workers and vendors

DATABASE COMMITTEEManages information integrity and ensures that our systems m eetour needs

FIELD STAFF FIELD STAFF FIELD STAFF FIELD STAFF

SENIOR EXECUTIVES

GLOBAL HUMAN RIGHTS AND SOCIAL RESPONSIBILITY

PRESIDENT & COO

FIELD STAFF

CHAIRMAN & CEO

REGIONAL LEADERUnited Statesand Canada

REGIONAL LEADERCaribbean, Centraland South America

REGIONAL LEADERMiddle East,

Europe and Africa

REGIONAL LEADERIndia and

Southeast Asia

REGIONAL LEADERChina and Far East

MANAGERLicensees

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H U M A N R I G H T S

3

Type of Supplier Description Approach to Code/Assessment Number of Factorie

Internal PVHis responsible for product, from Must meetPVHcode of conduct requirements 263 (representing approxdesign and raw materials selection Compliance assessments completed byPVH of PVHsourced products)through quality control Human Rights team

Th ird Party Th ird p arty is resp onsible for Must meetPVHcode of conduct requirements 138 (representing approxproduct design, manufacture, Compliance assessments completed byPVH of PVHsourced products)and quality control Human Rights team

Licensee Licensees design, develop, m anufacture, Must meetPVHcode of conduct requi rements 670 under 139 l icense aconduct quality control, and sell a Compliance assessments com pleted byspecified product category in permitted independent external monitors approved byPVHgeographical regions

Licensee SuppliersWe license our trademarks to third parties to produce goods under our brands that we choose not to sell directly.Our licensing agreements require that all licensees adhere to the same human rights and labor law requirementsand protocols for the factories that produce goods for them under such license agreements as we require of the factories that we use. Compliance assessments for the licensees factories are performed by independentexternal monitors approved by us. There are additional challenges associated with monitoring our licensees

factories, particularly since we do not have direct relationships with these factories. Our ongoing goal is to helpestablish and/or strengthen our licensees compliance efforts. We conducted global training during 2008improve procedures and reporting practices for licensees. This report does not cover our licensees complianceachievements or failures. We expect to include this information in our future reports. The chart below identifiesthe scope of the supply chain compliance program referred to above:

Textile/Raw MaterialsOur compliance program focuses on the factories that we engage to manufacture our finished products. Wegenerally do not evaluate raw materials or trim suppliers because they are further upstream in the supply chain.However, if we become aware of a critical human rights or labor issue, we address the problem. For example,when we learned about widespread forced child labor in the cotton industry in Uzbekistan, we banned Uzbek cotton from our products. The countrys lack of progress in addressing this practice forced us to take action,as child and forced labor are zero tolerance issues for PVH . Moreover, we worked together with otherstakeholders to strongly urge the Uzbek government to stop this practice and improve the overall conditionsin their cotton industry. For more information on the cotton industry in Uzbekistan, please refer towww.iwpr.net/galleries/centasia/grabka/01.html

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Integrating A Shared Commitment Code of Conduct

At PVHWe have integrated our A Shared Commitment code of conduct into business practices by ensuring thatour associates, suppliers, vendors and business partners observe and take ownership of our principles.We incorporate human and labor rights compliance into our supplier evaluation process, along with price,quality and logistics considerations. To do this, we implement documented procedures and maintain closecommunication between our sourcing and the human rights teams. We educate our sourcing associates oncode requirements and the compliance process as part of their new-hire orientation and ongoing training.Additionally, we conduct periodic meetings with our business units and require them to participate in criticaldiscussions with suppliers on failed compliance performance.

With Our Business Partners

To ensure external compliance with A Sha redCommitment, our sourcing teams review our coderequirements and compliance process with allprospective suppliers and business partners. Theserequirements are also outlined comprehensively in ourSourcing Guidelines, Evaluation Forms and MostCommonly Asked Questions guidelines, all of whichcontain important factory compliance information.

New vendors and factories must agree to abide bythese standards prior to our agreement to work withthem. All purchase orders include a paragraph reservingthe right to reject production if the factory has beenfound to be in non-compliance.

Finally, we have translated A Shared Commitmentinto 12 languages. We place posters in factories toinform workers of the requirements of the code ofconduct. We also work with the suppliers to incorporatethese obligations in their workers manuals.

H U M A N R I G H T S

3 4

BulgariaDenmark France

GermanyHungaryItaly

NetherlandsPortugalRomania

SwitzerlandTurkeyUnited Kingdom

JordanLebanonSyria

ChinaHong KongMacau

CambodiaThailandVietnam

Korea

Taiwan

Philippines

IndonesiaMalaysia

Japan

Australia

BangladeshIndia

MoroccoSouth Africa

EgyptKenya

MadagascarMauritius

DominicanRepublicEl SalvadorGuatemalaHondurasMexicoNicaraguaPanama

ArgentinaBrazilColombiaPeruUruguayVenezuela

U.S.A.Canada

PVH World Sourcing Map

Total Countries = 56Total Factories = 1071

SwazilandTunisia

PakistanSri Lanka

Zimbabwe

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PVH s Code of Conduct

We created our code of conduct known as A Shared Commitment Requirements for Suppliers,Contractors and Business Partners in 1991 and revised it in 1998 to reflect the FLA s code language thatwas drawn from internationally recognized human and labor rights conventions and negotiated withunions, apparel and footwear companies and non-governmental and pro-labor organizations.

Our A Shared Commitment code of conduct elements are: compliance with all legal requirements nondiscrimination no use of child labor no use of forced labor absence of harassment and abuse provision of a healthy and safe work environment payment of at least minimum wages and mandated benefits compliance with hours-of-work restrictions recognition of freedom of association compliance with all environmental requirements preference for vendors who share our commitment to communities

The progression from code compliance to sustainable supply chain management requires leadersin companies, civil society and government to work together in developing the right policies, tools andskills. Social responsibility concerns everyone, from the designer to the raw material supplier to themanufacturer and finally the consumer. Companies like PVH have been playing a leadership role inpromoting labor standards in the global supply chain. Auret Van Heerden, President and CEO , Fair Labor Association

Su stainable C om p lianc ePhilosophyOur goal is to bring about positive change and fostertransparency and commitment to improve the working

conditions at our suppliers manufacturing facilities.We seek to partner with suppliers who will sharethis goal.

Our experience in creating one of the first humanrights compliance programs in the apparel industryhas influenced our commitment to utilize sustainablefactories in our supply chain. We define a sustainablefactory as a manufacturing facility that efficientlyand effectively self-manages all elements of codecompliance by developing, implementing and

sustaining the social elements of their internal controlsystem.

The traditional monitoring approach, based solelyon an auditing process, has resulted in general

awareness of conditions and important improvementsin areas like health and safety. However, this approachhas not driven sustainable improvements in practicesconcerning wages, overtime, freedom of association,discrimination and other labor rights that business andcivil society groups originally envisioned. We believethat to make progress, the industry must movetowards sustainable compliance, where supplierstake ownership of human rights and fair laborpractices within their organizations with the goalof identifying, correcting and preventing violations.

We view our role at PVH as facilitators in promotinsuch action.

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H U M A N R I G H T S36

Assessment, Engagement and Remediation ProcessWe follow a procedure that involves assessment, engagement and remediation to ensure that our suppliersand business partners respect human rights and comply with labor law. Ultimately, this process results in thegranting or denial of approval for production or termination of the relationship. We may place productionin factories that have conditions that require remediation (but no zero tolerance issues), provided they agree

to an aggressive timeline and Corrective Action Plan (CAP) and demonstrate transparency and commitment toimprovement. In such cases, PVH will place production with an agreement to follow up on specific progresstargets. Our Factory Assessment, Engagement and Remediation Process is outlined in the chart on page 37 :

Factory Assessment Process

What:The assessment includes: Confidential interviews with factory workers without the participation of management Documentation review, including a review of payroll, time recording system, production records,

financial documentation and permits Observation and factory walk-through Cross verification between interviews, observation, walk-through and documentation review

When:We conduct factory audits every 12 to 18 months after initial factory approval.

How: Focus on policies, procedures and systems at the factory level Key Performance Indicators (KPIs) are used to measure factory performance Exit meeting with factory management, includes full disclosure of all non-compliance issues,

unless there is a concern about the well-being of a given worker or workers

Compliance letter formally communicated2008 Factory Audits:We conducted 382 factory evaluations for our internal and third party suppliers in 2008 .

Rating system:Our rating system measures frequency and severity of non-compliance flaws and classifies factoriesinto four categories: in compliance, requires a follow up, in remediation and not in compliance. We alsoassess the factory managements transparency, commitment, communication and attitude. We do notestablish a relationship with factories where zero tolerance issues are identified.

We are in the process of revising our rating system to assess both overall performance and progress tobetter ascertain which factories are committed to continuous improvement and reaching total compliance.

Factory approval:The Human Rights Approval Committee must approve a factory prior to the placement of businessby individual business units. This committee currently consists of the EVP Foreign Operations, theSVP Global Human Rights and Social Responsibility and the SVP/ Managing Director PVH Far East, Ltd.

Subcontracting Policy:Factories are not allowed to subcontract.

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H U M A N R I G H T S 37

Critical Engagement and Impact Program

In 2002 , we recognized the need to move beyondtraditional monitoring, which is characterized by itsfocus on auditing and penalties for non-compliance, inorder to achieve our vision of sustainable compliance.

To that end, we developed our Critical Engagementand Impact Program (CEIP), focusing on a factorystransparency and continued improvements incompliance performance over time. The concept ofa sustainable factory was conceived through thisprogram, with the goal of strengthening policies,

procedures and systems at the factory level particularly those critical to labor relations, suchas hiring, promotion and discipline, as well asestablishing and maintaining effective communicationchannels between management and workers.

Since our CEIP was introduced, the beyondmonitoring movement has become a vehicle forengagement and collaboration among leading apparelcompanies and stakeholders.

Introduce code,expectations and

assessment process

Factory Disclosure andEvaluation Request

Factory Assessment

Engagement andRemediation

Progress Assessment

Red FlagDiscussion(1x only)

In Remediation orRequires Follow Up

Not In Compliance Zer o Toleranc e Findin g

In Compliance No Flaw s Ident ifi ed

StatusDecision

Agreement tomove forward

No agreement

No ProgressShown

Some ProgressShownSignificant Progress

StatusDecision

Production approved Exit Relationship

Activities Participant Outcome

Global Sourcing Factory understandin Global Human Rights Department process and ex Factory

Factory Factory enters proces Global Sourcing SVPGlobal Human Rights

Global Human Rights Factory audit findingRegional Team Status recommendati

Human Rights Approval Committee Status decision(Eliminates conflicts of interestthrough geographical autonomy)

Factory Corrective Action Pla Global Human Rights timeline approvePV

Regional Team KPIs and compliance Capacity building act Factory standard ope

procedures

Secure grievance cha

Global Human Rights Issue progress updateRegional Team Status recommendati

Human Rights Approval Committee Status decision

Factory Aggressive Correctio Global Sourcing Plan and timeline SVPGlobal Human Rights byPVH Global Human Rights KPIs and compliance

Regional Team Final decision

Progress Approval

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Based on our experience, traditional monitoring prompts a behavior of non-disclosure by management. UnderCEIP , however, this transparency challenge is reduced significantly. Examples of non-disclosure and lack of transparency include coaching factory workers to misrepresent working conditions, double sets of payrollrecords, as well as falsifying production records to hide overtime hours and to avoid payment of legal wages.Prior to the inception of our CEIP , we found a non-transparency ratio as high as 90% in Asia regions but since

its inception, this ratio was reduced to 33% for these regions.

The following chart shows instances of non-transparency by geographical region in 2008 . The overall ratio ofnon-transparency for 2008 was 29% . This ratio factors in incidences of non-disclosure of compliance issues thatwe identified in all regions during the year over total number of factory assessments conducted during the sameperiod.

Region Number of instances

United States and Canada 1

Caribbean, Central and South America 0

Middle East, Europe and Africa 5

India and Southeast Asia 9

China and East Asia 98

Total 113

OverallRatio 29%

Number of assessments

10

38

7

108

219

382

Issue Identified Remediation Action

Multiple health and safety problems Implementation of a Health and Safety Committee comprised of factorymanagement and workers; Procedures and training will be required

Mult ip le workers gr ievances Implementat ion of an e ffec t ive secured grievance procedure; Trainingof factory management, supervisors and workers will be required

The remediation process under CEIP incorporates root cause analysis to identify underlying problems andcapacity building often critical to train management and workers. Our team functions as facilitators factorymanagement maintains full responsibility for implementing improvements in a timely manner. This process

facilitates management buy-in, enables skills building and fosters long term solutions. The following tableprovides examples of remediation carried out under CEIP:

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Once we have engaged a factory in CEIP , we conduct periodic progress assessments to determine whetherthe CAP has been implemented. Unannounced progress visits to factories undergoing remediation are madeat the discretion of our Global Human Rights regional team and usually occur in cases where there is a lackof progress in remediation and/or a lack of transparency from factory management. Factories that do notmeet their CAP timelines, or that do not show signif icant progress, are given a final opportunity to put into place

a CAP on terms acceptable to us. If an agreement to move forward with factory compliance is not achieved,the relationship is terminated.

Active Factories

InCompliance (1 )

0 50 100 150 200

Active Factories InCEIP

Requires Follow Up (2)

Tota l active factories as of 12/31/08 = 401Tota l CEIP factories as of 12/31/08 = 233

32 78

27 46

In Remed ia tion (3)

Not inCompliance (4 )

17 4

31

Red Flagged (5 ) 72

The following chart shows the compliance levels of the active factories, including those participating in CEas of December 31, 2008:

The classifications of factories in the table above have the following meanings:

(1) In Compliance indicates the number of active factories that have reached compliance

(2) Requires Follow Up indicates the number of factories pending verification of improvements

(3) In Remediation indicates the number of factories in our sustainable compliance program. These factories have an approvedCAPand timeline.

In order to remain in this classification, a factory must meet progress targets.(4) Not In Compliance indicates the number of factories that have not displayed transparency and commitment necessary to eCEIPprogram.

(5) Red Flagged indicates the number of factories where no progress has been achieved over time, or a severe non-compliancesuch as anti-union activity, subcontracting or child labor has occurred, or where there is an indicator of risk, such as financiasanctions. During2008, we experienced an increase in the number of red flags, which we attribute to the global economic crisis price-pressure effect. We have discontinued or are discontinuing doing business with these factories.

Factory Improvement PerformanceSustainable compliance requires significant time investment and innovation by the Global Human Rightsregional teams in our Global Human Rights and Social Responsibility Department. In order to analyze the impactof our efforts on factory working conditions, we compared non-compliance findings from assessmentsconducted during January to March 2008 period in factories that were active as of December 31, 2008 wthe non-compliance findings in subsequent follow-up audits at those facilities. The chart on the following pagehighlights the improvements achieved in each category at those factories. We were able to resolve anaverage of 82.4% of non-compliance in less than a year. We also recognized that some non-compliance issues,such as freedom of association, collective bargaining and non-discrimination require a longer time period tobe resolved.

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H U M A N R I G H T S40

Universe = 60 factories audited January through March 2008

0 100 200 300 400

82%

75%

87%

88%

93%

91%

83%

78%

57%

100%

100%

Health and Safety

Wages and Benefits

Hours of Work

Legal Requirements

Harassment and Abuse

Environmental Requirements

Transparency: Unreliable Records

Non-discrimination

Freedom of Association

Child Labor

Forced Labor

Commitment to Communities

NUMBER OF NON-COMPLIANCE ISSUES

Issues Identified

in Q1 Audits

Issues Resolved byClose of 2008

ImprovementPerformanceAverage82.4%

Red Flag ReportingIn 1998 , we issued a standard operating procedure for Red Flag Reporting, requiring all our associatesto report on any significant non-compliance concern or event in a given factory, manufacturing locationor country. Suspected red flags are reported to the Senior Vice President of Global Human Rights andSocial Responsibility and the Executive Vice President of Foreign Operations. Incidents are immediatelyinvestigated and remediation takes place or the relationship terminated, as appropriate.

In 2008 , we developed a second tier CEIP 2.0 , which includes a deeper root cause analysis and encouragesbest practices such as workers committees. We plan to develop an even more progressive curriculum, CEIP3.0 , for our most advanced suppliers in 2009 . This program will be geared to helping manufacturing facilitiesbecome sustainable factories.

To provide information on factory status and to track remediation progress, we maintain an online databasesystem that is regularly updated for all factories. The applicable Global Human Rights regional team trackscompliance through initial, progress and final factory audits, as well as through the CAP status reports. We arein the process of upgrading our database to improve accuracy and efficiency and will begin implementation of the new system in 2009 .

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Secure Grievance Channel