Columbia Sportswear 2011 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 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.
We design, develop, market and distribute active outdoor apparel, footwear, accessories and equipment
under four primary brands: Columbia®, Mountain Hardwear®, Sorel®and Montrail®. 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. Our products feature innovative technologies and designs that protect
outdoor enthusiasts from the elements, increase comfort and make outdoor activities more enjoyable. Our brands
complement each other to address the diverse outdoor performance needs of a wide variety of outdoor consumer
segments.
Our brands are distributed through a mix of wholesale distribution channels, our own direct-to-consumer
channels (retail stores and e-commerce), independent distributors and licensees. In 2011, our products were sold
in approximately 100 countries. We employ creative marketing strategies designed to increase demand, and to
create and reinforce consumer awareness of our brands. All of our products are manufactured by independent
factories located outside the United States.
The popularity of outdoor activities, changing design trends and consumer adoption of innovative
performance technologies affect consumer demand for 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, while our operating costs are more equally
distributed throughout the year. Since 2008, the expansion of our direct-to-consumer operations has increased the
proportion of sales and profits that we generate in the fourth calendar quarter. As a result, our sales and profits
tend to be highest in the third and fourth calendar quarters. In 2011, approximately 65 percent of our net sales
and all of our profitability were realized in the second half of the year, illustrating our dependence upon sales
results in the second half of the year, as well as the less seasonal nature of our operating costs.
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 persistent volatility in economic conditions. 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. The current economic environment in
key markets, coupled with inflationary cost pressures and input cost volatility, has reduced the predictability of
our business.
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