One Tough Mother

"Oh no?!" says Gert Boyle and looks at me as sternly as possible. I've just told her that in person she doesn't look nearly as formidable as in the "Mother Boyle" advertisements, in which she and her son Tim display all that is possible with clothing from Columbia Sportswear. FashionUnited traveled to Portland, Oregon, for a conversation with Gert Boyle. The firm was founded by her father, but under her leadership it has grown to be one of the largest outdoor clothing manufacturers in the world and market leader in skiwear in the United States.

It was 1937 when Paul Lamfrom decided to flee with his family from the Nazi regime in Germany to America. He left behind a successful clothing factory in Munich and nearly all his money and possessions, but sought safety for himself and his family. An uncle had earlier come across to scout out the territory, and it was through him that the family came to end up in Portland, Oregon. It was there that 67 years later I spoke with Paul's daughter Gert, who is still quite active in the business. "We traveled by ship from Germany to New York", said she about their departure. "My father had purchased first class tickets, since he had to leave all his money behind anyway. That was quite a trip!"

Once he'd arrived in Portland, Paul took over the Rosenfeld Hat Company. He gave the company a new name: Columbia Hat Company, named after the Columbia River, which forms most of the border between the states of Oregon and Washington. "My father decided that our family also had to make a new beginning; we were in a new country and needed to learn a new language. From that moment on no more German was spoken in our house."

Gert Lamfrom was 13 when she arrived in America and spoke not a word of English. But she learned quickly and in 1946 received her sociology degree from the University of Arizona. In 1948 she married Neal Boyle, who went to work for his father-in-law in the business. The business grew slowly but steadily. So that the firm could enter other market segments, the name was changed to Columbia Sportswear Company in 1960. When Paul suddenly died of a heart attack four years later, Neal took over the helm. He saw expansion possibilities and took out a considerable loan in September 1970.

Neal himself couldn't carry out his expansion plans however, because three months laterfate intervened. Neal awoke with pain in his chest. With the help of 12 year old Sally, Gert got her husband into the car and tried to reach the hospital as quickly as possible. But she didn't make it, and the 47 year old Neal died in her arms in the parking lot of a fire station. "He was an Irishman who could tell stories like no other", she said. "He could always make me laugh. And that was good because in those days we certainly had no money for other things."

That afternoon an attorney showed up with questions about the loan Neal had just arranged. There was work to do at the store. Middle daughter Kathy (18) had just begun college and since son Tim (21) was already reasonably well along in his studies, he helped his mother try to hang on to the business. But that wasn't to be. Both suppliers and customers had little faith in the inexperienced mother and son. And also within the business there were rumblings. "It was unbelievable", says Gert. "I had no experience with bookkeeping, so I trusted my personnel completely. Suddenly one of the bookkeepers gave notice that she wouldn't come to work until she received a raise. I was at the end of my rope, so I gave her the raise. But what she didn't think of was that women hold on to things. So I let her do the bookkeeping while I observed how she did it. As soon as I could do it myself, I fired her."

The hard work bore few fruits. Sales dropped steadily and finally she found herself negotiating with potential buyers for the sale of the company. "Buyers? Vultures you mean!" Finally when one prospect, after a laundry list of concessions and demands, came up with a final bid of $1400, something snapped in Gert. The shy housewife and widow who would rather have said nothing at the meeting came back with a verbal cannonade and showed him out of her office. As he was trying to get out of the building as quickly as possibly, she called after him: "For that amount I'll gladly run the company into the ground myself!"

It was a turning point. Gert and Tim went all out and got things slowly under control. And this time they had some luck: halfway through the seventies the market for sportswear and outerware improved. Columbia's sales numbers began to climb and at the end of the decade the business was profitable for the first time. They were continuously striving to keep up with the competition. Features such as an extra panel/pocket on the sleeve of a ski jacket were copied as they are thought up. "Finally it dawned on us that the one thing that couldn't be copied, was the brand itself."

Therefore in 1984 a startup advertising agency in Portland was hired. Gert became the central character as a controlling and meddlesome mother who makes her son's life difficult. Tim wasn't originally so sure of the idea, but "the longer I thought about it, the more logical it seemed. Gert is ruthless and resolute and worries constantly about quality control. Besides she is terribly opinionated, in short she is "One Tough Mother". Indeed, everyone has a mother and most people have a sense of humor, so it can work worldwide". It was a gamble, but one that paid off. Twenty years later the campaign is still extremely successful, both in the U.S. and overseas, and is an important part of Columbia's identity. Gert Boyle has become quite famous and the campaign has raked in the prizes. Thanks to the 'Mother Boyle' campaign sales have climbed from $3 million in 1984 to around $950 million in 2003.

The products themselves are also responsible for this success. At the beginning of the eighties a project was started to develop a jacket for hunters, who frequently complained that they needed a thick jacket for cold mornings, but a thinner one for warm afternoons. Gert and Tim came up with the Quad Parka, a new jacket with a removable lining. Years earlier, on her kitchen table, Gert had designed a special jacket for fishermen, supplied with all sorts of handy pockets and compartments, and that jacket had been very successful. In 1983 the two models were combined into the Bugaboo, named after the Bugaboo mountain range in Canada, notorious for its extreme weather conditions. The Bugaboo - not to be confused with the Dutch baby buggy of the same name - has become the best selling jacket in the history of skiwear.

Columbia has also been sold in Europe since the mid eighties, but only in the past couple of years has Columbia developed a strong brand name for itself there. In 2003 nearly 4000 retailers in 13 EU countries brought in $135 million. Columbia expects good things from Europe. Since more people live in northern regions than in the US, Europe is a prime market for the cold weather clothing in which the company specializes. In order to facilitate expansion in Europe, a huge distribution center has been built in Cambrai, France. By far the greatest part of production occurs in Asia, so central distribution is crucial for Columbia's worldwide sales network. The Boyles realize that production is one thing, but selling is something entirely different. They listen to retailers and consumers about what they'd like to see. Owing to this Columbia is one of the few companies that actually listens to feedback from the people who buy their products. "As long as we keep listening to consumers, things will go well. If we begin to think that we know more than the consumer, then we have a problem."

In retrospect Gert explained how she kept things going in difficult times. "It was necessary, there was no other option if we didn't want to go under. If someone asks you if you can swim the North Sea, you say, probably not. But if they dump you into the ocean, you learn how to swim in a hurry. That's really how my whole life has gone." Gert also realizes that without good business connections success would not have come. Early on she developed a relationship with a banker who specialized in helping businesses get off the ground. At the time he also provided a loan to a startup shoe factory. That was Nike.

Gert Boyle has been the face of Columbia Sportswear for decades. She is now 80, and although her son officially took over the helm from her in 1989, she doesn't see why you should be obliged to retire when you turn 65. "What should I do then, sit at home? The housework? Bah!" Tim has a better idea. During a meeting with potential investors, right before the company went public in 1998, someone asked what would happen to the identity of Columbia if the matriarch of the company died. Tim stood perplexed and looked at his mother as if the possibility had never occurred to him. Even Gert didn't know what to say. There followed a long silence. Suddenly Tim's face brightened. "That's easy", he said, "we'll just have her stuffed!".

Bram Strijbos
Translated by Dave Leslie from an article in Dutch, published in the January edition of FashionUnited Magazine NL.

Columbia reports record results Q2

Columbia Sportswear Company announced record second quarter net sales of $171.1 million for the quarter ended June 30, 2004, an increase of 12.5 percent over net sales of $152.1 million for the same period of 2003. The Company reported record net income for the second quarter of $10.7 million, a 13.8 percent increase over net income of $9.4 million for the same period of 2003.

Compared to the second quarter of 2003, U.S. sales increased 17.0 percent to $105.9 million, European sales increased 20.1 percent to $24.5 million, Canadian sales increased 13.6 percent to $12.5 million, and Other International sales decreased 6.6 percent to $28.2 million for the second quarter of 2004.

Excluding changes in currency exchange rates, European sales increased 9.9 percent, Canadian sales increased 7.9 percent, and Other International sales decreased 10.0 percent for the second quarter of 2004. Consolidated net sales for the second quarter of 2004 increased 10.1 percent, excluding changes in currency exchange rates, compared to the same period of last year.

For the second quarter of 2004, sportswear sales increased 31.4 percent to $90.4 million, footwear sales increased 8.5 percent to $30.7 million, accessories sales increased 13.8 percent to $6.6 million, equipment sales increased 4.0 percent to $2.6 million, and outerwear sales decreased 12.6 percent to $40.8 million compared to the second quarter of 2003. Tim Boyle, Columbia’s president and chief executive officer, commented, “Our second quarter results demonstrate the continued strength of our brands domestically and internationally.

Based on our current outlook, we believe that our strategies will enable us to generate third quarter 2004 revenue growth of 9 to 10 percent, and net income growth of 3 to 5 percent, compared to the third quarter of 2003. For the full year 2004, we anticipate net sales growth of 12 to 13 percent, and net income growth of approximately 10 to 11 percent, compared to 2003. These projections are forward-looking in nature, and are based on backlog and forecasts, which may change, perhaps significantly.”

www.columbia.com
July 22, 2004

Foreign sales boost at Columbia

Columbia Sportswear on Friday announced net sales of USD 217.3 million for the fourth quarter ended December 31, 2002, an increase of 1.4%. The Company reported net income for the fourth quarter of USD 29.1 million, a 20.2% increase over net income of USD 24.2 million for the same period of 2001. The company did especially well in foreign regions. Domestic sales decreased but Canadian, European, and other international sales all increased for the fourth quarter of 2002.

For full year 2002, the Columbia reported record net sales of USD 816.3 million, an increase of 4.7%. The Company reported net income for 2002 of USD 102.5 million, an increase of 15.4% compared to the Company's net income of USD 88.8 million for 2001.

The increase in net sales for 2002 is attributable to growth in the Company's key merchandise categories as well as relative strength in each of the Company's key geographic markets. Specifically, compared to 2001, outerwear sales were up 4.8% as well as sportswear sales, footwear sales and accessory sales.

Tim Boyle, Columbia's president and chief executive officer commented, "Our steadfast approach to tight inventory management and effective cost controls has allowed us to achieve healthy gains in sales and net income. (…) With exciting new product flowing into the stores for the upcoming spring season in all categories, including footwear, and favorable product reviews for our fall 2003 product offerings generally, I remain optimistic about the future of Columbia's business."

February 1, 2003
www.columbia.com

Strong Q3 for Columbia

Casual clothing maker Columbia Sportswear Co. said this week that third-quarter profit rose nearly 15 percent, helped by strong sales in outerwear and sportswear. The company said net income in the third quarter (seasonally its strongest period) was USD 56.9 million (GBP 35,9m), compared with 49.6 million in the same period of the prior year.
Columbia, which makes ski wear, other outdoor clothing, and footwear, said net sales for the quarter rose 8.5 percent to USD 331.5 million (GBP 209,6m).

The company is expecting a one percent to two percent revenue decline for the fourth quarter, but anticipates a slight increase of up to three percent in net income. Columbia expects full-year 2002 revenue growth of up to four percent and sees net income growth between eight percent and eleven percent as "achievable targets".

Based in part on the spring 2003 order backlog, the company expects first-quarter revenue growth of 13 percent to 15 percent, and net income growth in the 14 to 16 percent range. For Columbia, spring accounts form a relatively small percentage of its overall business. The bulk of its revenues and profits normally come in the second half of the year. In the third quarter, outerwear sales rose 10.2 percent, sportswear sales increased 7.7 percent to USD 62.9 million (GBP 39,8m), while footwear sales for the period were flat.

October 26, 2002
www.columbia.com

Columbia presentation online

Outdoor apparel and footwear-specialist Columbia on Wednesday presented at the 2002 RBC Capital Markets Consumer Conference. Pat Anderson, Chief Operating Officer, Bryan Timm, Chief Financial Officer and Sean Beers, Director of Investor Relations provided information on the Company's strategic initiatives and operational issues during a 35 minute presentation.
The presentation took place at the The Villas of Grand Cypress in Orlando, Florida.

If you have missed the live-performance you can catch up online! The presentation will be webcast on the on the Investor Relations section of www.columbia.com. The web cast will be archived for two weeks.

www.columbia.com
10-02-02

Spectacular sales rise for Columbia

US sportswear specialist Columbia remains optimistic as it reports a sharp increase in second quarter profit due to better than expected sales growth and tax rate reductions. At the end of the quarter, profit was $ 7.5m (EUR 7.5m), up 17.2 per cent from the comparable period last year. For the first half of 2002, Columbia reported a net profit of $ 16.4m compared to $ 15m a year earlier.

Sales for the second quarter increased by 2.2 per cent to $ 124.2m, with strong international sales offsetting poor trading performance in the US and Canada, where sales declined by 1.3 and 8.9 per cent. In Europe, the company saw a growth of 8.9 per cent to $ 14.8m, while sales in the other international markets soared 25.4 per cent to $ 15.3m. Sales for the six months increased by 3 per cent to $ 267.4.

The Portland, Oregon-based company, which in February warned that "earnings growth for 2002 will be difficult to achieve" now said it expected net profit growth "in the high single digit range", after seeing first signs of improvement for its menswear business and continued strength for womenswear. Turnover for 2002 is expected to increase by 2 to 4 per cent, Columbia said.

www.columbia.com
3-8-2002

Columbia Sportswear repeats warning for 2002 as profit rises 51.5 percent

January 31, 2002 - Columbia Sportswear Company® , a global leader in the active outdoor apparel and footwear industries, today announced record net sales of $214.3 million for the fourth quarter ended December 31, 2001, an increase of 32.4% over net sales of $161.9 million for the same period of 2000. The Company reported net income for the fourth quarter of $24.2 million, a 79.3% increase over net income of $13.5 million for the same period of 2000. Earnings per share for the fourth quarter of 2001 were $0.61 (diluted), on 39.9 million weighted average shares, compared to earnings per share of $0.34 (diluted) for the fourth quarter of 2000 on 40.0 million weighted average shares.

Compared to the fourth quarter of 2000, the Company's Domestic sales grew by 31.5% to $152.7 million, Canadian sales increased by 60.7% to $24.1 million, and Other International sales increased 21.8% to reach $37.5 million. As a component of Other International, European sales increased by 22.8% for the period to $19.9 million from $16.2 million during the fourth quarter of 2000. Strength in sales for the period resulted from growth in the Company's outerwear and cold weather footwear businesses, which grew by 33.5% and 54.2% respectively during the fourth quarter of 2001 when compared to the same period of 2000. Earnings growth for the period was the result of increased sales volumes and better than previously anticipated gross margins as well as continued improvement in operating efficiencies.

For fiscal year 2001, the Company reported record net sales of $779.6 million, an increase of 26.8% over net sales of $614.8 million for 2000. The Company reported net income for 2001 of $88.8 million, an increase of 51.5% compared to the Company's net income of $58.6 million for 2000. Earnings per share for 2001 were $2.23 (diluted), on 39.8 million weighted average shares outstanding for the period, compared to earnings per share of $1.48 (diluted) on 39.6 million weighted average shares outstanding for 2000. The 2000 results include an approximate $0.07 per share (diluted) benefit due to the utilization of foreign tax credits which were not replicated in 2001.

The increase in net sales for the year is attributable to continued strength in the Company's key merchandise categories as well as strength in each of the Company's key geographic markets. Specifically, compared to 2000, outerwear sales were up 25.1% to $403.3 million, sportswear sales increased 14.7% to $232.9 million, and footwear sales grew 57.8% to $108.7 million for the period. Geographically, compared to 2000, the Company's Domestic sales grew by 25.6% to $551.3 million, Canadian sales increased by 28.8% to $81.3 million, and the Other International sales increased 30.3% to reach $147.1 million. As a component of the Other International classification, the Company's European sales grew by 39.5% to $82.3 million for the full year 2001 when compared to the same period of 2000. When measured in constant dollar terms, the Company's European revenue grew by 43.1% for the full year 2001.

Net income growth for 2001 was due primarily to (1) increased sales volumes (2) gross margin improvement in the U.S., and (3) continued improvements in operating efficiencies at the Company's North American distribution center which contributed to a decrease in Sales, General and Administrative (SG&A) expenses as a percentage of sales for 2001 to 26.8% from 29.9% for 2000.

Tim Boyle, Columbia's president and chief executive officer commented, "We are gratified by the Company's performance during the fourth quarter and full year 2001 despite the less than optimal weather conditions in North America through the fall retail season. On balance, and despite a challenging retail environment, the Columbia brand tended to outperform the competition during the period with particularly strong performance in women's and children's outerwear. Moreover, we continue to be encouraged about our international growth opportunities, particularly in Europe, as these businesses posted strong sales results and increased levels of customer penetration during the year."

Guidance
Boyle continued, "In keeping with our standard practice, we will announce our fall 2002 backlog in our first quarter earnings release on April 25th, 2002. For the first quarter of 2002, we currently anticipate flat revenues when compared to the first quarter of 2001. At this point we anticipate a decline in net income for the first quarter of 2002 in the 10-30% range when compared to the first quarter of 2001. For the second quarter of 2002, we currently anticipate revenue growth of up to 3% when compared to the second quarter of 2001. At this point we anticipate a decline in net income for the second quarter of 2002 in the 15-30% range when compared to the second quarter of 2001. Further out, it is difficult for us to gauge revenue and profitability levels until we gain more visibility into the fall 2002 season.

At this point, however, it is clear that several extrinsic factors, including persistent unseasonable weather in key markets in the U.S. during the fall and winter retail season and a challenging retail environment generally, will hamper our ability to grow the fall 2002 business at the level we previously anticipated. That said, it is our current belief that revenue growth in the low to mid single digit percentage range is achievable for the full year 2002 when compared to 2001. Based on this moderating consolidated revenue growth, coupled with additional fixed costs that are coming online for 2002, earnings growth for 2002 will be difficult to achieve. Please note that these projections are forward-looking in nature, and are based on backlog and forecasts, which may change, perhaps significantly. In light of the generally weak economy in the U.S. we are mindful that the economic well-being of retailers and consumers may adversely affect sales and profit margins and cause us to fall short of our current goals."

Founded in 1938 in Portland, Ore., Columbia Sportswear Company is a global leader in the design, sourcing, marketing and distribution of active outdoor apparel and footwear. As one of the largest outerwear brands in the world and the leading seller of skiwear in the United States, the Company has developed an international reputation for quality, performance, functionality and value. To learn more about Columbia Sportswear and the Sorel brand, please visit the Company's Web site at www.columbia.com or visit www.sorelonline.com.