<PAGE>
Filed pursuant to Rule 424(b)(4)
Registration No. 333-70405
PROSPECTUS
206,188 Shares
[LOGO OF NORTH FACE APPEARS HERE]
Common Stock
----------------
This prospectus relates to the public offering, which is not being
underwritten, of up to 206,188 shares of our Common Stock which is held by some
of our current stockholders.
The prices at which such stockholders may sell the shares will be determined
by the prevailing market price for the shares or in negotiated transactions. We
will not receive any of the proceeds from the sale of the shares.
Our Common Stock is listed on the Nasdaq National Market under the symbol
"TNFI." On January 13, 1999, the average of the high and low price for the
Common Stock was $12.875 per share.
----------------
Investing in The North Face common stock involves certain risks. See "Risk
Factors" beginning on page 5.
----------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
----------------
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
----------------
The date of this Prospectus is January 13, 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Where You Can Find More Information........................................ 3
The North Face............................................................. 4
Forward-Looking statements................................................. 4
Risk Factors............................................................... 5
Use of Proceeds............................................................ 9
Selling Stockholders....................................................... 9
Plan of Distribution....................................................... 10
Legal Matters.............................................................. 11
Experts.................................................................... 11
</TABLE>
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell, and seeking offers to
buy shares of The North Face Common Stock only in jurisdictions where offers
and sales are permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of The North Face Common Stock. In
this prospectus, the "Company," "The North Face," "we ," and "our" refer to The
North Face, Inc.
2
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public conference rooms. Our SEC filings are also available
to the public from the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this Prospectus, and later information filed with the
SEC will update and supersede this information. We incorporate by reference
the documents listed below and any future filings made with the SEC under
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
our offering is completed.
(1) The Company's Annual Report on Form 10-K for the year ended December
31, 1997, filed with the Commission on March 6, 1998;
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1998, filed with the Commission on May 15, 1998;
(3) The Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1998, filed with the Commission on August 14, 1998;
(4) The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998, filed with the Commission on November 13, 1998;
(5) The Company's Current Report on Form 8-K filed with the Commission on
July 7, 1998 and the Company's Current Report on Form 8-K/A filed with the
Commission on July 21, 1998;
(6) The description of the Company's Common Stock contained in its
Registration Statements on Form 8-A filed with the Commission on June 24, 1996
and July 7, 1998, including any amendments or reports filed for the purpose of
updating such descriptions.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Christopher F. Crawford
Chief Financial Officer
The North Face, Inc.
2013 Farallon Drive
San Leandro, California 94572
(510) 618-3500
You should rely only on the information incorporated by reference or
provided in this Prospectus or the prospectus supplement. We have authorized
no one to provide you with different information. We are not making an offer
of these securities in any state where the offer is not permitted. You should
not assume that the information in this Prospectus or the prospectus
supplement is accurate as of any date other than the date on the front of the
document.
3
<PAGE>
THE NORTH FACE
The North Face, together with its consolidated subsidiaries, designs and
distributes technically sophisticated outerwear, skiwear, functional
sportswear, tents, sleeping bags, backpacks and daypacks under The North
Face(TM) name. We believe that The North Face(TM) is the world's premier brand
of high-performance outdoor apparel and equipment.
The North Face offers a broad range of high-performance technically-oriented
outerwear, skiwear, outdoor equipment and functional sportswear, which we call
"Tekware," designed for extreme uses, such as high altitude mountaineering, ice
climbing, rock climbing, backpacking, skiing, snowboarding, hiking, training
and adventure travel. We characterize our apparel-related products as
"equipment for the body." As a result of the experience our company has gained
over thirty years as the brand of choice for many of the world's most
challenging high altitude and polar expeditions, we believe that The North
Face(TM) has achieved a unique level of authenticity. We believe that our broad
product line and our manifesto ("For over thirty years, individuals whose lives
depend on the performance of their gear consistently chose The North Face.")
truly differentiate The North Face from other companies. The North Face(TM)
products are original designs. We provide the original owner with a lifetime
warranty against defects in materials and workmanship.
The North Face is a Delaware corporation originally incorporated on May 16,
1994.
FORWARD-LOOKING STATEMENTS
This Prospectus and the documents incorporated herein by reference contain
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. Words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates," variations of
such words and similar expressions are intended to identify such forward-
looking statements. These statements are not guarantees of future performance
and are subject to certain risks, uncertainties and assumptions that are
difficult to predict. Therefore, actual results could differ materially from
those expressed or forecasted in any such forward-looking statements as a
result of certain factors, including those set forth in "Risk Factors," as well
as those noted in the documents incorporated herein by reference. In connection
with forward-looking statements which appear in these disclosures, investors
should carefully review the factors set forth in this Prospectus under "Risk
Factors."
4
<PAGE>
RISK FACTORS
The shares offered hereby are speculative in nature and involve a high
degree of risk. The following risk factors should be considered carefully. The
risks described below are not the only ones facing The North Face. Many factors
could cause our results to be different, including the following risk factors
and other risks described in this document or in the documents incorporated by
reference in this document. If any of the following risks occur, our business
would likely be adversely affected and the trading price of our common stock
could decline. This could result in a loss of all or part of your investment.
Consumer Preferences
Our future success depends on consumer demand for our products. If consumer
interest in outdoor activities declines or does not grow, demand for our
products could be adversely affected. If we are not able to respond
successfully to changes in consumer preferences, or if consumer preferences
shift toward competing products or completely away from the types of products
that we sell, our business would be adversely affected. We cannot assure you
that consumer demand for our products will grow.
Management of Growth; Relocation
Our future profitability will depend in significant part on our ability to
grow our business and manage our growth effectively. If our business grows, we
may face increased difficulties in managing our product design process, hiring
and retaining additional personnel and marketing and distributing our products.
We may also face difficulties in obtaining supplies of our products and
managing our supply levels, manufacturing services and working capital
requirements.
In August 1998, we relocated a portion of our company headquarters to
Carbondale, Colorado. In connection with this relocation and related
activities, we have recorded relocation and realignment expenses of
approximately $3.8 million through December 31, 1998. We may incur additional
expenses in connection with the relocation process. We cannot assure you that
we will successfully complete the relocation process and related activities.
Stock Market Risks
The trading price of our common stock has fluctuated significantly since our
initial public offering in July 1996. For example, in the third quarter of
1998, the trading price of our common stock declined significantly. The price
at which our common stock will trade in the future will depend on a number of
factors including:
. Our operating results;
. New products introduced by our company or our competitors;
. Market conditions, such as consumer demand, for our products;
. Changes in earnings estimates by analysts;
. Operating results that are more or less than estimates by analysts; and
. Speculation in the trade or business press regarding our company and our
products.
Factors unrelated to our performance, such as general conditions in the
retail industry, overall stock market price and volume fluctuations and other
economic conditions, may also affect the trading price of our common stock in
the future. In addition, future sales of substantial amounts of common stock by
our existing stockholders could adversely affect trading prices. Declining
trading prices could impair our ability to raise additional equity capital in
the future, which could materially adversely affect our business.
5
<PAGE>
Wholesale Strategy
Most of our wholesale customers are specialty outdoor product retailers. We
cannot assure you that our existing customers will continue or increase their
purchases of our products. Our preseason orders may not increase, and we may
not be able to fill reorders from our wholesale customers during each season.
We expect that sales of our products to wholesale customers will constitute an
increasing percentage of our total sales in the future. Because our gross
margins are lower on product sales to wholesale customers as compared to sales
by our retail stores, our overall gross margins may decline in the future.
Our wholesale strategy also depends in part on our ability to achieve
increased sales through our Summit Shop program. We face certain risks
associated with the Summit Shop program, including sourcing and managing higher
inventory levels, funding costs of fixtures without assurance of additional
sales or profits and supplying products that maintain consumer demand on a year
round basis. Additional Summit Shops may not open on a timely basis and their
financial performance may not meet our expectations. If the Summit Shop program
is not successful and we have to write off the costs of inventory and fixtures,
our business could be adversely affected.
International Operations
We sell our products internationally. Our business is subject to the risks
generally associated with doing business abroad, such as:
. Fluctuations in currency exchange rates;
. Tariffs and other trade barriers;
. Political and economic instability; and
. Potentially adverse tax consequences.
In particular, recent decreases in sales of our products in Asia have
affected our gross margins. We cannot assure you that sales of our products in
Asia will not continue to decline and thus further erode our gross margins.
We currently import more than 60% of our merchandise from contract
manufacturers located outside of the United States and primarily in the Far
East. A significant portion of our products are produced in China. From time to
time, the U.S. government has considered imposing punitive tariffs on apparel
and other exports from China. If the U.S. government imposes any such tariff,
the supply of products could be disrupted and their cost could substantially
increase, either of which could materially adversely affect our operating
results.
In addition, during the fourth quarter of 1998, we finalized a licensing and
royalty agreement for the sale of our products in China and Nepal. Uncertain
economic conditions in China, Nepal and elsewhere in Asia could result in
reduced, delayed or terminated orders for our products.
Dependence on New Products
In order to continue to grow our business, we must successfully introduce
new products and improve our existing products on an ongoing basis. We face
certain risks associated with the introduction of new products, such as:
. Targeting new markets, such as those for more casual outdoor uses;
. Offering products in wider price ranges;
. Product obsolescence;
. Increased product costs;
6
<PAGE>
. Increased pressure from competitors;
. Potential consumer rejection of new products or styles; and
. Potential dilution of our product image.
In May 1998, we announced our intention to design and contract for the
manufacturing of a line of outdoor performance footwear. We have scheduled the
launch of these new products in spring 1999. We cannot assure the timely
introduction of these products or the success of our effort in this market.
Reliance on Unaffiliated Manufacturers
We currently rely on approximately 50 unaffiliated manufacturers to produce
nearly all of our products. Ten of these manufacturers produced approximately
75% of our products in 1997 and 1998. We do not have long-term contracts with
our manufacturers, and we face competition from other companies for production
facilities and import quota capacity. None of the manufacturers we use produces
our products exclusively. We occasionally have received, and we may in the
future receive, shipments of products that do not conform to our quality
control standards. Any disruption in our ability to obtain quality
manufacturing services for our products could materially adversely affect our
business.
We seek to require that our independent manufacturers operate their
businesses in compliance with the laws and regulations that apply to them. Our
sourcing personnel periodically visit and monitor the operations of our
independent manufacturers, but we cannot control their business and labor
practices. If an independent manufacturer violates labor laws or other
applicable regulations, or if such a manufacturer engages in labor practices
that diverge from those typically acceptable in the United States, our company
could in turn experience negative publicity. Negative publicity regarding the
production of our products could materially adversely affect sales of our
products and our business.
Key Suppliers
Certain important materials used in our products are only available from one
or a limited number of independent suppliers. Our future success may depend in
part on our continued ability to purchase supplies of certain technically
advanced textile products developed by third parties. We may not be able to
obtain adequate supplies of such materials on acceptable terms, if at all, in
the future. In addition, we have benefitted from development support and joint
advertising arrangements with certain suppliers. We cannot ensure that these
arrangements will continue.
Fluctuation in Sales
Sales of our products historically have fluctuated for reasons unrelated to
our business, such as weather conditions or recessions or other economic
conditions which result in reduced consumer spending. We cannot control these
external factors that may adversely affect our business.
Competition and Trademarks
We face intense competition from major brand name apparel companies, other
large companies and smaller companies specializing in outdoor products. We own
and use a number of trademarks, some of which may be important in our efforts
to develop and maintain our competitive advantage and consumer demand for our
products. Certain of our competitors, both in the United States and abroad,
have copied and may in the future copy our trademarks and designs. We also are
aware of counterfeiting of our products. We may not be able to stop or
eliminate the copying of our trademarks or the counterfeiting of our products,
and we may unknowingly infringe on the proprietary rights of others. If we do
not avoid or successfully defend challenges to our trademarks or other
intellectual property rights in the U.S. and abroad, our business could be
materially adversely affected.
7
<PAGE>
Key Personnel
Our future success depends in part on the continued efforts of our key
executive officers and other key personnel, as well as our ability to retain
other current personnel and to recruit and retain new personnel. We cannot
assure you that our key executive officers or other key personnel will continue
with the company in the future. If we unexpectedly lost one or more of our
current senior executives or key employees, or if we were unable to replace
adequately any departed executive or key employee on a timely basis, our
business could be materially adversely affected. In addition, we cannot assure
you that any newly-hired executive or key employee will successfully manage our
operations.
Product and Warranty Liability
Consumers often use our products in severe weather conditions. Our insurance
may not adequately cover possible future losses from product liability claims.
We maintain a warranty reserve for the lifetime warranty offered on our
products, but future claims may exceed this reserve. In addition, if we
experience problems related to the quality or reliability of our products, our
reputation as a provider of high-quality products could suffer and our business
could be materially adversely affected.
Year 2000 Compliance
Many currently installed computer systems and software products are coded to
accept only two digit entries in the date code field. These date code fields
will need to accept four digit entries to distinguish 21st century dates from
20th century dates. As a result, during the next year, computer systems and
software used by many companies may need to be upgraded to comply with such
"Year 2000" requirements.
We have conducted an internal review of our information systems and we are
involved in an enterprise-wide project to upgrade or modify portions of our
software so that our computer systems will meet Year 2000 requirements. We have
been using both external and internal resources to reprogram or upgrade our
software. We plan to complete the modifications and upgrades, including
testing, of all systems by July 1999. We plan to complete the modifications and
upgrades, including testing, of our European systems by April 1999.
Through September 30, 1998, we had spent $62,000 to address Year 2000
compliance issues. The total cost of addressing Year 2000 compliance, currently
estimated at $400,000 by our management, is not expected to be material to our
operations. We believe that the modifications and upgrades to our software will
mitigate any problems associated with Year 2000 issues. However, if we do not
complete the process of modifying and upgrading our software in a timely
manner, or at all, the Year 2000 issue could have a material impact on our
operations.
We have surveyed our significant vendors and other third parties on whom we
rely to ensure that they will convert their systems in a timely manner. We
currently are in the process of analyzing third party responses to our survey.
We cannot be sure that other companies will convert their systems effectively
or in a timely manner. If third parties, such as suppliers, manufacturers and
other vendors, fail to meet Year 2000 requirements, our business could be
materially adversely affected.
8
<PAGE>
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares. All proceeds from the sale of the Shares will be for the account of the
Selling Stockholders, as described below. See "Selling Stockholders" and "Plan
of Distribution." Notwithstanding the foregoing, in the event the aggregate net
proceeds (including broker's commissions) from the sale of all the Common Stock
offered hereby exceeds $2,500,029.50 (plus 6% interest thereon from January 6,
1999), the Selling Stockholders have agreed to remit such excess to the
Company. In the event the Company receives any of such proceeds, the Company
intends to use such proceeds for general corporate purposes.
SELLING STOCKHOLDERS
The following table sets forth as of the date of this Prospectus, the name
of each of the Selling Stockholders, the number of shares of Common Stock that
each such Selling Stockholder owns as of such date, the number of shares of
Common Stock owned by each Selling Stockholder that may be offered for sale
from time to time by this Prospectus, and the number of shares of Common Stock
to be held by each such Selling Stockholder assuming the sale of all the Common
Stock offered hereby.
The Shares being offered by the Selling Stockholders were acquired from The
North Face in connection with our acquisition of a certain parcel of land in
Carbondale, Colorado. The Company may amend or supplement this Prospectus from
time to time to update the disclosure set forth herein.
<TABLE>
<CAPTION>
Shares Shares
Beneficially Beneficially
Owned Owned
Prior to After
Offering(1) Number of Offering(1)
--------------- Shares Being --------------
Name of Selling Stockholder Number Percent Offered Number Percent
--------------------------- ------- ------- ------------ ------ -------
<S> <C> <C> <C> <C> <C>
Pitkin Exchange, Inc. in Trust for
Gianinetti Investment
Corporation...................... 68,729 * 68,729 * *
Pitkin Exchange, Inc. in Trust for
R.P. Sewell & Company............ 68,729 * 68,729 * *
Pitkin Exchange, Inc. in Trust for
Richard L. Bradley............... 41,238 * 41,238 * *
Pitkin Exchange, Inc. in Trust for
David F. Baggerman............... 27,492 * 27,492 * *
Total........................... 206,188 1.6% 206,188 * *
</TABLE>
- --------
* Less than 1%
(1) Based upon 12,699,311 shares of Company Common Stock outstanding as of the
close of business on January 5, 1999 and including the shares to be sold
hereunder.
9
<PAGE>
PLAN OF DISTRIBUTION
The Shares covered by this Prospectus may be offered and sold from time to
time by the Selling Stockholders. The Selling Stockholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. The Selling Stockholders may sell the Shares
being offered hereby on the Nasdaq National Market, or otherwise, at prices and
under terms then prevailing or at prices related to the then current market
price, at varying prices or at negotiated prices. The Shares may be sold,
without limitation, by one or more of the following means of distribution: (a)
a block trade in which the broker-dealer so engaged will attempt to sell Shares
as agent, but may position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases by a broker-dealer as principal and
resale by such broker-dealer for its own account pursuant to this Prospectus;
(c) an over-the-counter distribution in accordance with the rules of the Nasdaq
National Market; (d) ordinary brokerage transactions and transactions in which
the broker solicits purchasers; and (e) in privately negotiated transactions.
To the extent required, this Prospectus may be amended and supplemented from
time to time to describe a specific plan of distribution.
In connection with distributions of the Shares or otherwise, the Selling
Stockholders may enter into hedging transactions with broker-dealers or other
financial institutions. In connection with such transactions, broker-dealers or
other financial institutions may engage in short sales of the Company's Common
Stock in the course of hedging the positions they assume with Selling
Stockholders. The Selling Stockholders may also sell the Company's Common Stock
short and deliver the Shares offered hereby to close out such short positions.
The Selling Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions which require the delivery to
such broker-dealer or other financial institution of Shares offered hereby,
which Shares such broker-dealer or other financial institution may resell
pursuant to this Prospectus (as supplemented or amended to reflect such
transaction). The Selling Stockholders may also pledge Shares to a broker-
dealer or other financial institution, and, upon a default, such broker-dealer
or other financial institution, may effect sales of the pledged Shares pursuant
to this Prospectus (as supplemented or amended to reflect such transaction). In
addition, any Shares that qualify for sale pursuant to Rule 144 may, at the
option of the holder thereof, be sold under Rule 144 rather than pursuant to
this Prospectus.
Any broker-dealer participating in such transactions as agent may receive
commissions from the Selling Stockholder and/or purchasers of the shares
offered hereby (and, if it acts as agent for the purchaser of such shares, from
such purchaser). Usual and customary brokerage fees will be paid by the Selling
Stockholder. Broker-dealers may agree with the Selling Stockholder to sell a
specified number of shares at a stipulated price per share, and, to the extent
such a broker-dealer is unable to do so acting as agent for the Selling
Stockholder, to purchase as principal any unsold shares at the price required
to fulfill the broker-dealer commitment to the Selling Stockholder. Broker-
dealers who acquire shares as principal may thereafter resell such shares from
time to time in transactions (which may involve cross and block transactions
and which may involve sales to and through other broker-dealers, including
transactions of the nature described above) in the over-the-counter market, in
negotiated transactions or otherwise at market prices prevailing at the time of
sale or at negotiated prices, and in connection with such resales, may pay to
or receive from the purchasers of such shares commissions computed as described
above.
To comply with the securities laws of certain states, if applicable, the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In addition, in certain states the Shares may not be sold
unless they have been registered or qualified for sale in the applicable state
or an exemption from the registration or qualification requirement is available
and is complied with.
The Company has advised the Selling Stockholders that the anti-manipulation
rules of Regulation M under the Exchange Act may apply to sales of Shares in
the market and to the activities of the Selling Stockholders and their
affiliates. In addition, the Company will make copies of this Prospectus
available to the Selling Stockholders and has informed them of the need for
delivery of copies of this Prospectus to purchasers at or prior to the time of
any sale of the Shares offered hereby. The Selling Stockholders may indemnify
any broker-
10
<PAGE>
dealer than participates in transactions involving the sale of the shares
against certain liabilities, including liabilities arising under the Securities
Act.
At the time a particular offer of Shares is made, if required, a Prospectus
supplement will be distributed that will set forth the number of Shares being
offered and the terms of the offering, including the name of any underwriter,
dealer or agent, the purchase price paid by any underwriter, any discount,
commission and other item constituting compensation, any discount, commission
or concession allowed or reallowed or paid to any dealer, and the proposed
selling price to the public.
LEGAL MATTERS
Certain legal matters relating to the validity of the securities offered
hereby will be passed upon for the Company by Wilson Sonsini Goodrich & Rosati,
Professional Corporation, Palo Alto, California.
EXPERTS
The consolidated financial statements incorporated in the Prospectus by
reference from the Company's Annual Report on Form 10-K for the year ended
December 31, 1997 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
11
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
206,188 Shares
[LOGO OF NORTH FACE APPEARS HERE]
Common Stock
----------------
PROSPECTUS
----------------
January 13, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
