Next Phase for North Face

NEW YORK — While increasing its European operations, The North Face is breaking ground with a dramatically expanded showroom here, a wider selection of sportswear and more merchandise for women.

The outdoor equipment and apparel firm, with annual sales of about $300 million, is a success story in the fashion and retail arena. Less than five years ago, the company faced bankruptcy amid slumping sales, heavy debt, accounting restatements and late distribution difficulties before it was bought by VF Corp. in 2000.

Now, the San Leandro, Calif.-based firm has hit on a formula of product innovation that, with strong back-end support from VF, has led to robust sales growth and profitability.

“We have found success as a lifestyle company that is rooted in technical performance,” Steve Rendle, president of The North Face, Americas, said in an interview. He spoke amid the sounds of drilling and hammering as the finishing touches were put on the firm’s renovated showroom at 873 Broadway. “Our goal is low double-digit sales growth and profits that grow faster than sales.”

The North Face is one of the few brands that has achieved crossover appeal between serious outdoor enthusiasts and inner-city teenagers. As a testament to its wide-ranging popularity, the brand is sold at department stores such as Bloomingdale’s and outdoor stores such as EMS and REI, as well as urban chains including Dr. Jay’s.

After selling to many department store chains in the late Nineties, the company now only sells to select Macy’s, Bloomingdale’s and Nordstrom locations, and plans call for department stores never to account for more than 10 percent of sales, Rendle said. North Face is sold in 1,800 doors in the U.S., and also has a growing international business. There are also eight company-owned stores in the U.S.

Founded in 1966 as an equipment supplier for climbers, The North Face now produces and distributes a wide range of products for women, men and children, including sportswear and outerwear, footwear, backpacks and handbags, tents, hats and eyewear. All of it is made in-house apart from eyewear, which is licensed to Italy’s Marcolin Group.

Seeking to build its sportswear business, the company last year started A5, a lifestyle-oriented cotton line that includes cargo pants, halter tops and tank tops in bright colors. Outerwear remains its largest category, generating about half of overall sales.Women have become more of a focus for the company in the last few years, Rendle said. While many offerings were unisex, there is now a large selection of outerwear and sportswear for women with smaller silhouettes and significantly more color, including pink, lime and pastel blue.

“For the first time, we sold more women’s outerwear this year than men’s,” Rendle said.

Reflecting the company’s growth, the renovated showroom has tripled in size. It has muted colors and brick walls with photos of The North Face-sponsored athletes rock climbing and running. Located across Broadway from Paragon Sports — Manhattan’s mecca for sports and outdoor gear — the showroom has an area devoted exclusively to footwear as well as two large apparel showrooms, an accessories area and a private meeting space with a high-definition television where teleconferences can be held with other offices.

“The showroom is a global showcase for the company,” Rendle said. “It is a way for us to show our products in our special environment.”