Business Wars The North Face vs Patagonia - Rescue Mission | 5
Apr 8, 2020
In the late 1990s, The North Face aimed for mass appeal by launching Summit Shops, but sales fell short, revealing deeper issues. As the brand battled inventory woes and financial struggles, VF Corporation saw an opportunity for acquisition. Meanwhile, Patagonia focused on sustainability, introducing innovative textile tech and its Common Threads program. The rivalry intensifies as both brands compete for eco-conscious consumers, setting the stage for a dramatic showdown over Black Friday strategies.
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The Summit Shop Flop
- In 1997, The North Face opened Summit Shops to attract mainstream customers.
- However, the expensive gear didn't sell as expected, leading to excess inventory.
The Barter Deal
- To hide losses, The North Face's finance chief, Christopher Crawford, made a barter deal for unsold inventory.
- He misrepresented the deal's profits, violating accounting principles.
Fraud Uncovered
- In 1999, a new auditor uncovered the fraudulent accounting practices.
- This led to Crawford's resignation, an SEC investigation, and a stock price plunge.
