VF Outdoor (doing business as The North Face) wants its customers to take a hike -- or take a stab at climbing Mount Everest. A subsidiary of V.F. Corporation, The North Face designs, distributes, and retails its own brand of high-performance outerwear, sportswear, footwear, and outdoor gear (including tents, sleeping bags, and backpacks). Its Cryptic, Flight Series, Steep Tech, and Summit Series collections feature rugged technical apparel and equipment. The North Face's products are sold through specialty sporting goods stores in North and South America, Europe, and Asia; more than 300 namesake stores operated by third parties in Europe and Asia; some 60 company-owned European and US outlets; and online.
The North Face is part of VF's outdoor and action sports division (or "coalition," as the parent company calls it). The division has carved out a niche in the outdoor market with the brands to buy for performance-oriented apparel, footwear, and gear. In addition to The North Face, its stable of brands includes Vans, Eagle Creek, and JanSport; the North Face label is its top revenue generator, however. The outdoor and action sports brands accounted for more than 40% of V.F.'s total sales in 2010, up from 38% in 2009. The division's sales rose by nearly 15% in 2010, much of that growth a result of almost 20% higher demand for The North Face brand. Looking to springboard from successes within its outdoor and action sports business segment, parent V.F. bought footwear maker Timberland for $2 billion in 2011. Known for its footwear, Timberland boasts some of the top names in outdoor shoes and apparel and makes a complementary addition to V.F.'s portfolio of brands. The move is expected to boost segment sales from some 40% to more than 50% of total revenue by late 2011 and to 60% of sales by fiscal 2015.
Brick-and-mortar stores move the bulk of North Face apparel and equipment, however, V.F. also markets the brand online in the US and across Europe. The parent, recognizing that e-commerce accounts for a growing percentage of its earnings, has been working to launch additional sites that peddle The North Face in Asia and other European countries.
Despite its strong performance in recent years, The North Face hasn't always been a high climber. The company has a history of teetering on the edge of doom. Before being bought by V.F. in 2000, its travails included restated earnings, distribution problems, an aborted management buyout, an ill-considered relocation to Colorado, and executive turnover. Rather than face filing for Chapter 11 bankruptcy protection, The North Face opted to be acquired. – less