Columbia Sportswear 2013 Annual Report Download - page 6

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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 designing, sourcing, marketing and distributing
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, together with its wholly owned subsidiaries
and entities in which it maintains a controlling financial interest.
We design, source, 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 2013, 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. Substantially 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
seasonal weather and discretionary consumer spending patterns. Our products are marketed on a seasonal basis and our
sales are weighted substantially toward the third and fourth quarters, while our operating costs are more equally distributed
throughout the year. The expansion of our direct-to-consumer operations since 2008 has further 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 2013, approximately 63 percent of our net sales and nearly 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 global economic conditions and seasonal weather patterns. Sales of
our products are subject to substantial cyclical fluctuation, the effects of unseasonable weather conditions, the relative
popularity of competitors' brands and the continued popularity of outdoor activities as part of an active lifestyle in key
markets. Volatile economic environments in key markets, seasonal weather patterns and inflationary or volatile input costs
reduce the predictability of our business.
For further discussion regarding the effects of the macro-economic environment on our business, see Part II, Item 7,
Management’s Discussion and Analysis of Financial Condition and Results of Operations.