Columbia Sportswear 2003 Annual Report Download - page 10

Licensing
In June 1999, we introduced a strategy to build brand awareness by licensing our trademarks across a range
of categories that complement our current offerings. We have since signed thirteen licensing agreements,
including North American agreements for Columbia brand casual and outdoor socks, packs and adventure travel
bags, belts and personal leather goods for men, thermal tops and bottoms, watches, leather outerwear, sport
cutlery and home furnishings. We also entered into two global licensing agreements for Columbia brand eyewear
and shoe and apparel care. In addition, we have a European licensing agreement for socks. In connection with the
Sorel acquisition, we acquired a license for shoe care products in North America.
Our United States sock licensee began shipping during fall 2000 in the North American market, and our
European sock licensee began shipping in spring 2002. Columbia brand packs and adventure travel bags and
belts and small personal leather goods for men were available beginning in spring 2001. Our watch licensee
began shipping products in spring 2002. Thermal tops and bottoms, shoe care products, eyewear and leather
outerwear licensees began shipping in fall 2002. Most recently our Columbia brand cutlery began shipping in
spring 2003.
We anticipate that our new Columbia brand tent and sleeping bag licensee will begin shipping these
products in spring 2004 to locations across North America. We expect the new home furnishing collection to
begin shipping in the fall of 2004.
Advertising, Marketing, and Promotion
Columbia’s unique, global advertising campaign featuring our Chairman, Gertrude Boyle, in the role of
cantankerous “Mother Boyle” and her son, Timothy Boyle, Columbia’s President and Chief Executive Officer, as
the ultimate test subject, is an integral part of Columbia’s brand identity. Our campaign features Columbia’s wry-
humored, good-natured ads in broad-based national print and broadcast media, ranging from Backpacker and
People magazine to Comedy Central and ESPN. We reach customers worldwide in our efforts to drive sales of
our products.
Sales through existing retail channels are enhanced by visual merchandising. Concept shops and focus areas
are located within the stores of our customers and are dedicated exclusively to selling our merchandise on a year-
round basis. These shops and focus areas promote a consistent brand image and feature the image of Gertrude
Boyle throughout our customer network.
In addition, we engage in cooperative advertising arrangements whereby wholesale customers receive an
allowance relative to the value of their purchases from us if specified qualitative advertising criteria are met and
if specified amounts are spent on the advertisements.
Inventory Management
From the time of initial order through production, distribution and delivery, we manage our inventory in an
effort to reduce risk. Our inventory management systems coupled with our enterprise-wide information system
have enhanced our ability to manage our inventories by providing detailed inventory status from the time of
initial factory order through shipment to our retail customers.
Additionally, through the use of incentive discounts we encourage early purchases by our customers to
promote effective inventory management. We provide our customers with staggered delivery times through the
spring and fall seasons. This also permits our customers and us to manage inventories effectively and thereby
diminish the likelihood of closeout sales. Through our efforts to match our purchases of inventory to the receipt
of customer orders, we believe that we are able to reduce the risk of overcommitting to inventory purchases. This
helps us avoid significant unplanned inventory build-ups and minimizes working capital requirements. This
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