Columbia Sportswear 2010 Annual Report Download - page 13

Our integrated marketing efforts are designed to deliver consistent messages about the performance benefits,
innovative technologies and styling of our products. We rely most heavily on advertising distributed through the
Internet, including e-commerce and social media sites; television and print publications; consumer-focused and
customer-focused events; branded retail stores in selected high-profile locations; enhanced branded displays and
merchandising techniques executed in stores in partnership with various wholesale customers; and consumer and
trade public relations efforts.
We work closely with our key wholesale customers to reinforce our brand message through cooperative
online, television, radio and print advertising campaigns, as well as in stores using visual merchandising display
tools dedicated exclusively to selling our merchandise on a year-round basis. We drive alignment through
established seasonal initiatives and provide our wholesale customers, regional offices, and international
distributors with creative direction and materials to convey consistent messages.
We employ a staff of in-store marketing and merchandising coordinators, who visit our customers’ retail
locations in major cities around the world to ensure that our products are favorably presented. We also reinforce
our marketing and product innovation messages through selected sponsorships of key outdoor influencers,
organizations and teams who serve as inspirational models of excellence to consumers and also through
sponsorship of selected outdoor events and competitions.
Our global internet marketing sites are used by consumers to research our products’ features and benefits, to
interact with content created to inform and entertain about each brand and its technologies, to be directed to
nearby retailers where they can purchase our products, and to directly purchase products for delivery in the
United States. Other unaffiliated consumer websites provide information about our brands and products and may
direct consumers to our wholesale customers where they can purchase our products.
Working Capital Utilization
We design, develop, market and distribute our products, but do not own or operate manufacturing facilities.
As a result, most of our capital is invested in short-term working capital assets, including cash and cash
equivalents, short-term investments, accounts receivable from customers, and finished goods inventory. At
December 31, 2010, working capital assets accounted for approximately 77% of total assets. As a result, the
degree to which we efficiently utilize our working capital assets can have a significant impact on our
profitability, cash flows and return on invested capital. The overall goals of our working capital management
efforts are to maintain the minimum level of inventory necessary to deliver goods on time to our customers to
satisfy end consumer demand, and to minimize the cycle time from the purchase of inventory from our suppliers
to the collection of accounts receivable balances from our customers.
Demand Planning and Inventory Management
As a branded consumer products company, inventory represents one of the largest and riskiest capital
commitments in our business model. We design and develop our seasonal product lines 12 to 18 months in
advance of their availability to consumers in retail stores. As a result, our ability to forecast and produce the
individual product styles that match ultimate seasonal wholesale customer and end-consumer demand and to
deliver products to our customers in a timely and cost-effective manner can significantly affect our sales, gross
margins and profitability. For this reason, we maintain and continue to make substantial investments in
information systems, processes and personnel that support our ongoing demand planning efforts. The goals of our
demand planning efforts are to develop a collaborative forecast that drives the timely purchase of an adequate
amount of inventory to satisfy demand, to minimize transportation and expediting costs necessary to deliver
products to customers by their requested delivery dates, and to minimize excess inventory to avoid liquidating
excess, end-of-season goods at discounted prices. Failure to achieve our demand planning goals could reduce our
revenues and/or increase our costs, which would negatively impact our gross margins, profitability and brand
strength.
7