Columbia Sportswear 2009 Annual Report Download - page 9

PART I
Item 1. BUSINESS
General
Founded in 1938 in Portland, Oregon, as a small, family-owned, regional hat distributor and incorporated in
1961, Columbia Sportswear Company has grown to become a global leader in the design, sourcing, marketing
and distribution of active outdoor apparel, footwear, accessories and equipment. Unless the context indicates
otherwise, the terms “we”, “us”, “our”, “the Company” and “Columbia” refer to Columbia Sportswear Company
and its consolidated subsidiaries.
As one of the largest outdoor apparel and footwear companies in the world, our products have earned an
international reputation for innovation, quality and performance. Columbia products feature innovative
technologies and designs that protect outdoor enthusiasts from the elements, increase comfort and make outdoor
activities more enjoyable. In addition to our Columbia Sportswear®brand, we also design, develop, market and
distribute active outdoor apparel, footwear, accessories and equipment under the Mountain Hardwear®, Sorel®,
Montrail®and Pacific Trail®brands. Our brands complement each other to address the diverse outdoor
performance needs of a wide variety of outdoor consumer segments. We have sought to leverage our brand
equity by expanding directly and through licensees into related outdoor and lifestyle merchandise categories,
promoting a “head-to-toe” outfitting concept.
Our brands are distributed through a mix of wholesale distribution channels, independent distributors, our
own retail channels and licensees. In 2009, our products were sold in over 100 countries. We employ creative
marketing strategies designed to increase demand and reinforce consumer awareness of our brands. All of our
products are manufactured by independent factories located outside the United States.
As a consumer products company, the popularity of outdoor activities and changing design trends affect the
desirability of our products. Therefore, we seek to influence, anticipate and respond to trends and shifts in
consumer preferences by adjusting the mix of available product offerings, developing new products with
innovative performance features and designs, and by creating persuasive and memorable marketing
communications to drive consumer awareness and demand. Failure to anticipate or respond to consumer needs
and preferences in a timely and adequate manner could have a material adverse effect on our sales and
profitability.
Our business is subject to many risks and uncertainties that may have a material adverse effect on our
financial condition, results of operations or cash flows. Some of these risks and uncertainties are described below
under Item 1A, Risk Factors.
Seasonality and Variability of Business
Our business is affected by the general seasonal trends common to the outdoor industry and is heavily
dependent upon discretionary consumer spending patterns. Our products are marketed on a seasonal basis and
our product mix is weighted substantially toward the fall season, resulting in sales and profits being highest in the
third calendar quarter. The expansion of our owned retail operations during 2008 and 2009 has begun to have a
modest effect on the seasonality of our business, increasing the proportion of sales and profits that we generate in
the fourth calendar quarter.
Results of operations in any period should not be considered indicative of the results to be expected for any
future period, particularly in light of the current macro-economic environment. Sales of our products are subject
to substantial cyclical fluctuation, the effects of unseasonable weather conditions, and the continued popularity of
outdoor activities as part of an active lifestyle in key markets. Our net sales volumes have been affected by the
volatility of the global economy and its impact on customer financial health, affecting their placement of advance
orders, order cancellations and seasonal reorders. Sales tend to decline in periods of recession or uncertainty
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