How Did The North Face Go From One San Francisco Store to the World's Biggest Outdoor Brand? | QDaily Business History

Its founder has just died. A good moment to look at what kind of company he actually built.

Douglas Tompkins loved extreme sports, and in the end an extreme sport killed him. He was 72.

On December 9, local time, he was kayaking in Chile when something went wrong and he ended up in the water. He died of severe hypothermia.

Tompkins was an American environmentalist and one of the best-known outdoor adventurers in the world, and his death was bound to move people.

"He flew private planes, he climbed the summit of just about every high mountain in the world, and then he dies in a lake, swallowed by nature. It's shocking," said his daughter, Summer Tompkins Walker.

Douglas Tompkins

That is how life goes: the accident always arrives in dramatic form. But for most people the sting of his death has to do with his other identity. He founded the outdoor brand The North Face and the women's clothing brand Esprit — two brands that count as genuine successes.

Tompkins started Esprit in 1968. In the 2015 fiscal year Esprit's sales came to nearly HK$20 billion, and Credit Suisse put the value of the Esprit brand as high as $3.4 billion.

The North Face did better still. It is now the biggest outdoor brand in the world. According to the market research firm SportsOneSource, The North Face held 33.5% of the outdoor apparel market in 2012.

It is a shame Tompkins will not be there to see The North Face turn 50 next year. How did the brand he built with his own hands grow from one outdoor-gear shop in San Francisco into a brand selling more than $2 billion a year? That is the story we want to tell.

A brand's success begins with a good start

In 1966, Douglas Tompkins opened a gear shop in San Francisco's North Beach, selling tents, backpacks and sleeping bags.

Tompkins picked the gear himself, because he had noticed that San Francisco took in huge numbers of visitors headed for Yosemite National Park every year, and that some of them did not want to simply drive around the park. They wanted to walk into it.

Those visitors were really two groups. The first was America's growing middle class. They had more spare money, worked fewer hours and now owned cars, so their entertainment was no longer bound by the city, and outdoor sports entered American life as a new way to spend free time.

The Economics of Outdoor Recreation, published in 1967, put it this way: "Since the end of World War II, national parks and national forests have been used more and more heavily ... This is becoming the new way of life for American middle-class families, replacing the home, the yard, indoor entertainment and outdoor leisure inside the city."

Besides the middle class, one other group turned into regulars at outdoor sports: young Americans. They went outdoors mainly to get away from the noise of the world.

"Through the whole of the 1960s American society was in upheaval — peace demonstrations, student marches and the civil rights movement made the world look crazy and confused," wrote Ron Watters, a professor at Idaho State University. "Outdoor sports, free of interference from government and society, gave young people a way out of all that."

Middle-class families and young people, without consulting each other, both picked outdoor sports as their recreation, or their way of life. It was this booming interest in the outdoors that made Tompkins decide to build a business on meeting their needs.

"These visitors needed to buy gear, but at the time there were no shops that could meet their needs. So they had no choice but to go to army-surplus stores for their equipment," said Ann Krcik, a spokesperson for The North Face, describing how things stood then.

The store Tompkins opened gave these visitors somewhere to go besides the army-surplus counter, and because he had been adventuring around the world before he opened it, he understood what they wanted better than most.

So The North Face caught on right away. Before long the little shop in North Beach had become a gathering place for outdoor enthusiasts.

Finding the demand for outdoor sports does not mean you win in the end

For a long time after it was founded, The North Face did one thing: meet the needs of outdoor sports, single-mindedly.

The most important part of that was making the gear more technical. The best-known example is that Tompkins was among the first to adopt a new tent design, using flexible, lightweight poles to hold the whole tent up from the sides in place of the traditional rigid pole propped through the middle. The new design was light, easy to carry and roomier inside, and it was later adopted everywhere.

At the same time The North Face kept opening up new categories of outdoor gear. In 1968 it launched the Ruthpack, a backpack it said "opened a new era of lightweight packs." Outdoor clothing, footwear and travel bags followed.

Also in 1968, The North Face announced where it stood: "to make the best outdoor products in the world."

The North Face flagship store in London

In the brand's early years that was plainly the right choice, since The North Face got off the ground on the support of a crowd of outdoor enthusiasts.

But it also stored up trouble. If The North Face served only those enthusiasts it would find it hard to grow, since outdoor sports were a fairly narrow pursuit.

There is a rule about how innovators fail: having found a new need in the market, they can care so much about the need they dug up that they miss the fact that what they are really satisfying is not that need at all.

Tompkins did not break the rule. In 1969 he decided to sell The North Face and give himself over to the outdoor sports and conservation work he loved.

Esprit, the other brand he founded, may be the plainer example. When it started, Esprit aimed at young women who wanted fashionable clothes in simple cuts, and it did reasonably well early on.

But the winners in that young-women's market now are fast-fashion brands such as Zara, H&M and Uniqlo. Esprit is a long way from fashion. Being the first to spot a need in a market does not make you the one who ends up winning it.

Serve the outdoor enthusiasts, or move toward the broader mass sporting-goods market — that was the hard choice The North Face faced.

A successful brand still has to watch the mass market, and turn a narrow thing into mass demand

In the end The North Face chose the mass market.

After Tompkins left, the brand kept opening stores and expanding. By 1999 its sales had reached $200 million.

Much of that fast growth came from sponsoring the gear of professional explorers, which proved the brand knew what it was doing.

"Working with explorers helped The North Face a lot," said Marie Driscoll, an analyst covering the sporting-goods industry. "So in New York City people think, if even professional explorers trust The North Face, maybe I should give it a try."

While it was expanding, though, The North Face's supply chain broke down. In the late 1990s it became notorious for missing delivery dates. Customers complained again and again that they had ordered a tent for a camping trip and the tent still had not arrived on the day they were supposed to leave.

Worse, some North Face stores were putting ski gear on the shelves after winter was over. From production to logistics, the whole supply chain was close to paralyzed.

The losses were enormous: The North Face reported a $100 million loss for the full 1999 fiscal year. With nowhere left to go, it was bought in April 2000 by the old American apparel company VF Corporation for $25.4 million.

For a company like VF, The North Face's problems were not hard to fix. VF paid off its debts and rebuilt its supply chain. VF became the brand's strongest support, bringing long experience to bear on getting operations back on track.

Under VF, The North Face went down the mass-market road faster still. "Now when you see someone wearing The North Face, you think this person has probably just started getting into the outdoors," sighed Alex Bruni, an outdoor enthusiast who is also an executive at a pharmaceutical company.

On how a specialist outdoor brand was turned into "everyday stuff," The North Face's current president, Todd Spaletto, says its success did not come from pandering to a wider set of consumers but from building an emotional tie with them.

Most shots in The North Face's ads look like this: a skier coming down a snow-covered mountain, a hiker hacking away at a column of ice in his path, a water-skier rising out of the water.

A shot typical of a North Face ad

What those shots carry is not outdoor sport itself but the nerve to face a challenge. "Everyone wants to go beyond himself; only the challenges differ," Spaletto said. "You can find that feeling in outdoor sports too, and that is how we build our tie with consumers."

Put plainly: in The North Face's hands, outdoor sport became another word for a dream, and buying a North Face product meant buying the dream. Pushed by that feeling, The North Face sold itself to more and more consumers who, on the face of it, had nothing to do with the outdoors.

Which is how we arrived at the present situation, where everyone wears The North Face. New York Times contributor Alina Tugend wrote that once, as a middle-aged woman getting out of her own car, she saw a young man walking toward her in exactly the same North Face jacket she was wearing.

China is no different. One North Face employee joked that the brand sells to Beijingers who have never been outside the Fifth Ring Road.

In this year's run of marketing, The North Face has thrown out the idea of outdoor sport altogether. Its spring-summer campaign in March turned the camera on people in the city and told them that a windproof, waterproof North Face jacket would carry them through the rain in comfort.

Qian Kecheng, The North Face's digital marketing manager, told QDaily in an earlier interview: "Judging by the consumers we reach through our stores and social platforms, most of them live mainly in the city. Their lives are actually quite full — they don't only wear our clothes when they're doing outdoor sports; everyday styling matters too. Even in the city you can have the spirit of 'exploration.'"

Since 2007 its North American business has also released collaborations with the American streetwear brand Supreme, twice a year for spring-summer and fall-winter, built around basics such as shell jackets and down coats, to make its outdoor gear look a little more fashionable.

All of it says the same thing: The North Face has gone down the mass-market road and will not be coming back.

A North Face x Supreme collaboration piece

Whether Tompkins liked it or not, The North Face is the biggest outdoor brand there is

Whether founder Douglas Tompkins was willing to accept The North Face's drift toward the mass market can no longer be established.

After he sold it, Tompkins put all his attention into outdoor sports and protecting the environment. The only thing he still cared about in the two clothing brands he had founded was whether their production, shipping and the rest were harming nature and wrecking the places people go to be outdoors.

Douglas Tompkins died doing the outdoor sport he loved. But the brand he founded, along with the outdoor sports it stands for and everything people imagine about them, has swollen into a $646 billion market, and The North Face's own annual sales now pass $2 billion.

Cover image from: Hellorf Creative