North Face 2001 Annual Report Download - page 27

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For example, we’ve achieved tremendous success with our Retail Floor
Space M anagement process, which enables us to determine the optimal
product mix for individual stores, replenish goods rapidly and efficiently, and
keep the right products in stock with minimal inventory. Higher sales on
less inventory is a winning formula for success in today’s retail environment.
Over the past several years, we’ve also invested heavily in new forecasting
and planning tools. They have helped us better align production with
current demand and keep our inventories lean.
FOCUS ON PROFITABILITY AND IMPROVED RETURNS
Over the past two years, we’ve worked steadily to put the pieces in place
for long-term, sustainable grow th and improved profitability. Our goal is
to achieve a return on capital of 17%. To achieve this, we have targeted
long-term sales grow th of 6% annually and operating margins of 14%. We
also continue to target a debt to capital ratio below 40% and a dividend
payout rate of 30%. We’ll be active managers of our brand portfolio,
investing in our core brands and searching for new ones. And w e will
continue to ensure that our associates have the tools and support they
need to be successful.
Looking at our performance in 2001, I am confident that our portfolio of
pow erful brands, motivated people, adaptive technology and advanced
business processes uniquely position us for growth and increased
shareholder value in a dynamic and constantly changing market.
Mackey J. McDonald
Chairman, President
and Chief Executive Officer
25