North Face 1999 Annual Report Download - page 11

Dow Jones Industrial Average and an increase of
20% percent in the S&P 500 Index. At current
levels, we believe our shares represent an excellent
investment opportunity. In July, our Board of
Directors authorized the repurchase of an addi-
tional 10 million shares. In 1999, we repurchased
four million shares of VF, representing an invest-
ment of $149 million. We plan to continue to
repurchase our shares this year as well.
In October, our Board of Directors
announced the election of two new members,
Erskine Bowles and Daniel Hesse. Mr. Bowles is
a general partner with Forstmann Little & Co.,
a major New York private equity firm, and is
managing director of Carousel Capital, a North
Carolina-based merchant bank he cofounded.
He previously served in the Clinton administra-
tion, most recently as White House Chief of
Staff. Mr. Hesse, formerly President and CEO of
AT&T Wireless Services, has recently been named
President and CEO of TeraBeam Corporation.
Both men bring the benefit of their far reaching
experience and insight to VF.
Building World-class Capabilities
Our industry has experienced tremendous shifts
over the past several years, with consumer trends
changing practically at the speed of light. The
range of products offered within such “basic”
categories as jeans, knitwear and intimate apparel
continues to expand rapidly. The Internet has
created an entirely new medium for people to
communicate, shop and conduct business.
Today’s consumers have more information and
more choices about where, how and when to
purchase products and services than ever before.
VF is ready for this new information-based
economy. Indeed, we view ourselves as the tech-
nology play of the apparel industry. For some
time now we’ve been investing in the types of
technologies and processes that will give us a
competitive edge. We are fundamentally chang-
ing the way we do business in order to respond
better and faster to consumer demand for a wide
variety of differentiated brands and products.
These changes are all part of VF’s consumerization
strategy – our way of creating and maintaining a
consumer-driven business that ensures future
growth and profitability.
One important component of this effort,
our Consumer Response System (CRS), is a
disciplined product development process
that helps us identify the needs of
specific consumer segments and meet
them with a continuous flow of new
products. The CRS process has been
successfully installed in our Vanity
Fair Intimates operation. During the
next two years, it will be extended
throughout our domestic jeanswear,
Bestform and JanSport businesses.
Another key initiative, which
benefits both VF and our retail
partners, is our Retail Floor
Space Management (RFSM) or
micromarketing program.
It allows us to customize
product assortments to
match the profile of
the consumers
who shop in a
particular retail
location. Both
CRS and RFSM
are discussed more
fully, beginning on
page 14.
Mackey J. McDonald
Chairman, President and
Chief Executive Officer
[9]