Columbia Sportswear 2004 Annual Report Download - page 7

PART I
Item 1. BUSINESS
General
Founded in 1938 in Portland, Oregon, as a small, family-owned, regional hat distributor, Columbia
Sportswear Company has grown to become a global leader in the design, sourcing, marketing and distribution of
active outdoor apparel and footwear with operations in North America, Europe and Asia. As one of the largest
outerwear companies in the world and the leading seller of skiwear in the United States, we have developed an
international reputation for quality, performance, functionality and value across an expanding product line.
Known for selling durable and dependable products at a reasonable price, we have leveraged Columbia’s brand
awareness by expanding into related merchandise categories and developing our “head-to-toe” outfitting concept.
During 2004, we distributed our products to approximately 12,000 retailers in over 60 countries.
Our business is subject to many risks and uncertainties that could have a material adverse effect on our
financial condition, results of operations and stock price. For a description of some of these risks and
uncertainties, we encourage you to read “Factors That May Affect Our Business and the Price of Our Common
Stock” in Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Products
We group our merchandise into five principal categories—(1) outerwear, (2) sportswear, (3) footwear,
(4) related accessories and (5) equipment. The durability, functionality and affordability of our products make
them ideal for use in a wide range of outdoor activities, including skiing, snowboarding, hunting and fishing,
hiking, backpacking, mountaineering and rock climbing, as well as for casual wear. We are committed to
innovative, functional product design and use durable, high-quality materials and construction across all of our
product lines. We believe our broad range of competitively priced merchandise offers consumers one of the best
price-value equations in the outdoor apparel and footwear industries.
We believe our award-winning advertising campaign effectively positions the Columbia®brand as outdoor,
active, authentic, value-oriented and distinctly American. Our products are designed to reinforce this image. In
both the design and production phases, we focus our efforts on the development of popular, higher volume
products at moderate price points. Our attention to technical details such as pockets that double as vents, double
storm flaps over zippers and “gutters” that facilitate water run-off, as well as the use of special technical
materials, contribute to the authenticity and functionality of our merchandise.
The following table presents the net sales and approximate percentages of net sales attributable to each of
our principal product categories for each of the last three years ended December 31 (dollars in millions):
2004 2003 2002
Net Sales % of Sales Net Sales % of Sales Net Sales % of Sales
Outerwear ..................... $ 460.3 42.0% $443.7 46.6% $422.5 51.8%
Sportswear ..................... 396.4 36.2 311.3 32.7 245.2 30.0
Footwear ...................... 184.6 16.9 148.6 15.6 110.0 13.5
Accessories .................... 46.1 4.2 43.5 4.6 38.6 4.7
Equipment (1) .................. 7.9 0.7 4.7 0.5 — —
Total ..................... $1,095.3 100.0% $951.8 100.0% $816.3 100.0%
(1) The equipment product category was introduced with the acquisition of Mountain Hardwear, Inc. in 2003
and consists primarily of tents and sleeping bags.
2