<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                ----------------
                                    FORM 10-K

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
        EXCHANGE ACT OF 1934
                    FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
                                       OR
[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
        EXCHANGE ACT OF 1934

                         COMMISSION FILE NUMBER 0-28596

                               THE NORTH FACE, INC.                   
             (Exact name of registrant as specified in its charter)

     DELAWARE                                               94-3204082
  (State or other jurisdiction of                        (I.R.S. Employer 
  incorporation or organization)                      Identification Number)

2013 Farallon Drive, San Leandro, California                  94577
(Address of principal executive offices)                   (Zip Code)

Registrant's telephone number, including area code: (510)618-3500

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:  Common Stock, par
value $.0025 per share

     Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days. Yes X  No ___

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [   ]

     On March 17, 1997, the aggregate market value of the registrant's voting 
stock held by non-affiliates was $104,386,599.

     As of March 17, 1997, the number of shares of the registrant's Common Stock
outstanding was 11,204,865.

                       DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the registrant's Annual Report to stockholders for the fiscal
year ended December 31, 1996, are incorporated by reference in Parts I, II and
IV of this report, and portions of the registrant's definitive Proxy Statement
for the Annual Meeting of stockholders scheduled for May 13, 1997, are
incorporated by reference in Part III of this report.

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                                     PART I

ITEM 1.  BUSINESS.

GENERAL

The North Face, Inc., a Delaware corporation, together with its consolidated
subsidiaries (the "Company"), designs and distributes technically sophisticated
outerwear, skiwear, functional sportswear, tents, sleeping bags and backpacks,
all under The North Face-Registered Trademark- name.  The Company believes that
The North Face-Registered Trademark- is the world's premier brand of
high-performance outdoor apparel and equipment. 

In 1994, the Company acquired substantially all of the assets and assumed 
certain liabilities of its predecessor, The North Face, a California 
corporation, in a transaction approved by a bankruptcy court administering 
the bankruptcy proceedings commenced in January 1993 by the predecessor's 
parent company Odyssey Holding, Inc. and certain corporate affiliates of 
Odyssey.  The Company was formed for the purpose of owning and operating the 
predecessor's former business.  Marsden S. Cason, Chairman and a director of 
the Company, and William N. Simon, Chief Executive Officer, President and a 
director of the Company, served as officers and directors of the predecessor 
and certain corporate affiliates of the predecessor.  See the biographical 
information for these two individuals under "Executive Officers of The North 
Face, Inc." in this Item 1 of Part I of this report.

Certain statements in this report marked with an asterisk (*) are forward
looking, and actual results may differ materially from the results expected by
the Company.  The Company's future growth and operating results may be adversely
affected by a number of factors, including those set forth under "Factors That
May Affect Our Business" and elsewhere below in Item 1 of this report.  There
may also be important, unforeseen risks not described herein.

Portions of the Company's 1996 Annual Report to its stockholders for the fiscal
year ended December 31, 1996 (the "1996 Annual Report") are incorporated herein
by certain references below and included as Exhibit 13 to this report.
 
INDUSTRY OVERVIEW

Technical outdoor apparel and equipment historically have been used primarily by
professional climbers and serious outdoor enthusiasts.  In recent years, these
products have become increasingly popular among a broader group of consumers. 
The Company believes that this growth has been the result primarily of (i) an
increase in outdoor recreational activities by the general population, (ii) a
growing demand for highly functional products, (iii) a growing acceptance of
outdoor apparel as casual wear and (iv) an increase in the technical
sophistication of products in this field.

PRODUCTS

The Company offers a broad range of high-performance, technically-oriented
outerwear, skiwear, outdoor equipment and functional sportswear ("Tekware")
designed for extreme applications, such as high altitude mountaineering, ice
climbing, rock climbing, backpacking, skiing and snowboarding.  The Company
characterizes its apparel-related products as "equipment for the body."  As a
result of the experience gained through over 30 years as the brand of choice for
many of the world's most challenging high altitude and polar expeditions, The
North Face-Registered Trademark- has achieved a unique level of authenticity. 
The North Face-Registered Trademark- products are original designs and carry a
lifetime warranty for the original owner against defects in materials and
workmanship.  In 1995, sales of outerwear, equipment, skiwear and other products
represented approximately 50%, 25%, 14% and 11%, respectively, of net sales.  In
1996, sales of outerwear, equipment, skiwear, Tekware and other products
represented approximately 52%, 25%, 12%, 7% and 4%, respectively, of net sales.
     
The Company's goal is to offer the most technically advanced products in its
field and to establish the industry standard in each product category.*  The
Company designs its leading edge products for extreme applications, such as high
altitude mountaineering, ice climbing and polar expeditions, which it believes
represents only a small fraction of its potential customers.  These leading edge
products serve to reinforce The North Face-Registered Trademark- brand image
while appealing to

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<PAGE>

non-extreme users.  The Company also strives to offer
products at more moderate price-points that remain "best of class" by
incorporating many of the features, materials and technology used in its leading
edge designs.*  The Company believes that this product design philosophy
enhances The North Face-Registered Trademark- brand while appealing to the
broader consumer market.  

OUTERWEAR

The Company's outerwear is engineered to provide protection in cold, wet and
windy conditions and to accommodate the range of motion required for the most
extreme activities.  It is designed to adapt to varying conditions and
situations, taking into account the unpredictability of the weather and the fact
that some outdoor activities alternate between periods of extreme exertion and
total rest, requiring a proper balance between ventilation and insulation.  Each
year, the Company enhances its outerwear lines by adding new products and design
innovations.*  Overall, the Company  introduced 108 new outerwear products for
1997.  The Company now offers four principal lines of outerwear and a line of
Technical Apparel Accessories. 

EXPEDITION SYSTEM-Registered Trademark- is an advanced, integrated cold weather
clothing system in which several pieces (including full body suits, pants,
jackets, vests, anoraks and accessories) work together in layers to create
warmth, protection and safety.  Since 1994, the Company has significantly
expanded the Expedition System-Registered Trademark- product line by creating
new families of products around existing products, such as the Mountain Light
and Denali fleece families, adding new product segments, such as the Himalayan
and Kichatna Series, significantly upgrading and restyling existing products,
such as the Nuptse Series, and adding products specifically designed for women.

WEATHER SYSTEMS is a collection of four distinct series of outerwear designed to
provide protection in wet and windy conditions, while maintaining comfort
throughout variations of season, temperature, moisture and wind, and over a wide
range of activities.  For example, the Hydrenaline-TM-  Series, introduced in
1994, is a technically advanced line of shell outerwear based on a proprietary
microfiber fabric, Hydrenaline-TM- , that combines features of breathability and
water resistance and is ideal for hiking, running, mountain biking, cross
country skiing and other aerobic outdoor activities.

SEARCH AND RESCUE-TM- introduced a new concept to the outdoor industry.  This
collection of one piece suits, shells and fleece is designed to support and
protect mountain search and rescue teams in extreme weather conditions. Although
intended for search and rescue experts, several pieces within the collection are
expected to appeal to consumers who desire its protective attributes for less
extreme outdoor activities.

REMOTE TERRAIN GEAR ("RTG") was created for backcountry snowboarding and
combines elements of the Company's Expedition System with unique snowboarding
features to create products such as pants that are cut in the seated
snowboarding position.  Unlike most snowboarding clothing which caters to the
fashion tastes of snowboarders, the highly functional RTG is expected to appeal
to a performance-oriented snowboarding market.

TECHNICAL APPAREL ACCESSORIES includes a wide range of high-performance thermal
underwear, head wear, gloves and mittens which have been tested extensively
throughout the world in extreme conditions.  This collection was expanded
significantly in 1996 with the introduction of nine new products.

TEKWARE-TM- 

In 1996, the Company entered the broader casual apparel market with its
introduction of Tekware,-TM- an innovative line of high-performance outdoor
apparel made from a new generation of synthetic fabrics and developed in
collaboration with E.I. DuPont de Nemours & Co. ("DuPont") and other
companies.  Tekware is offered in three lines, Climbing, Training and Trekking,
each with styles for men and women.  Each line features a broad collection of
pants, shorts, shirts, pullovers, vests, tank tops and tights, each in several
styles.  Tekware is designed for serious outdoor pursuits and is especially
functional for everyday use.  The Company currently offers 101 Tekware products
for Spring 1997 and is offering 111 Tekware products for Fall 1997.*   Preseason
orders for Tekware for the 1997 Spring season increased more than 165% over the
1996 Spring season.
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ADVANTAGES OF TEKWARE-TM- OVER COTTON CLOTHING

Features                                          Tekware      Cotton
--------                                          -------      ------
Quick Drying                                        /X/
Abrasion Resistant                                  /X/
Shrink Resistant                                    /X/
Tear Resistant                                      /X/
Fade Resistant                                      /X/
Stain Resistant                                     /X/
Mildew Resistant                                    /X/

Tekware provides an effective complement to the Company's other product
offerings and will continue to be prominently featured in the Summit Shops.* 
The Company believes Tekware will be very appealing to wholesale customers and
will increase the amount of selling space devoted to The North Face-Registered
Trademark- products.*  The Company believes Tekware's broad, year-round product
line and consistent new product introductions will help create sustained
consumer interest in The North Face-Registered Trademark- brand.*  In addition,
unlike some of the Company's other product categories, Tekware has the potential
to become a repeat or "replenishment" business as consumers purchase new
sportswear to complement or replenish their existing wardrobes.* 

EQUIPMENT

Equipment is critical to The North Face-Registered Trademark- image and
reputation and plays an extremely important role in its research and
development, field testing and marketing activities.  The Company offers four
comprehensive lines of technical outdoor equipment: tents, sleeping bags,
backpacks and accessories.  The Company has increased its equipment sales over
the last two years by introducing new products and refining existing products. 
The Company has introduced 64 new equipment products for 1997.

TENTS.  The Company is regarded as the premier supplier of expedition tents
built to withstand extreme weather conditions.  The Company currently offers an
extensive line of 22 tent models, designed to suit a wide variety of weather
conditions and applications.  The Company offers 9 expedition-quality tents,
including models such as the VE-25, long renowned as the world's finest base
camp tent, and the Mountain Tent, rated by CLIMBING MAGAZINE in 1995 as the best
two-person expedition tent.  The Company's best selling tents are its
three-season and recreational tents that also offer superior features and are
used by a wide range of consumers for backpacking and camping.

SLEEPING BAGS.  The Company offers 41 models of sleeping bags for mountaineering
and backpacking that differ in insulations, shell fabrics and linings.  The
Company offers 16 models in its goose down line and 25 models in its synthetic
insulated line of sleeping bags to provide comfort in temperatures ranging from
-35 F to 40 F.  During 1995 and 1996, the Company introduced several innovations
in fabrics, insulation and construction of both its goose down and synthetic
insulated lines.  For Fall 1996, the Company introduced synthetic sleeping bags
made from Polarguard 3D, a high-performance product developed by Hoechst
Corporation ("Hoechst"), in close collaboration with the Company.

BACKPACKS.  The Company offers a comprehensive line of backpacks grouped into
three categories: (i) large volume, internal frame packs for extended
backcountry trips; (ii) "tech packs" for sport specific activities and (iii) day
packs.  The large volume, internal frame pack category consists of three
different lines based on differing load carrying efficiencies.  These packs are
made in a range of torso lengths and in sizes to fit both men and women. The
"tech pack" line consists of 15 models of sport specific packs designed with the
participation of the Company teams of climbers, explorers and extreme skiers for
specific activities, such as high altitude climbing, ice climbing, rock
climbing, backcountry skiing and snowboarding.  During 1996, the Company
introduced new lines of daypacks, lumbar packs and cargo bags providing an
opportunity for a wide audience of hikers, students and the general public to
own a The North Face-Registered Trademark- product at a more moderate price. For
1997, the Company has introduced 45 new products in the categories of backpacks,
"tech packs," day packs, cargo bags and pack accessories.

                                       4
<PAGE>

SKIWEAR

The Company offers skiwear designed for extreme skiing in remote areas.  While
the Company's skiwear is designed for extreme users, it has become increasingly
popular among recreational skiers.  The North Face-Registered Trademark- skiwear
products include parkas, jackets, anoraks, ski pants, ski suits, gloves and
other accessories.  The Company's six skiwear collections -- Heli, Steep Tech-
Registered Trademark-, Men's Extreme-Registered Trademark- Gear, Women's
Extreme-Registered Trademark- Gear, Men's Extreme-Registered Trademark- Light
and Women's Extreme-Registered Trademark- Light -- have been designed for
specific applications, including helicopter skiing and backcountry skiing. The
Company's skiwear offers highly technical features for optimal weather
protection, maximum freedom of movement and appropriate ventilation, including
the use of tough, abrasion-resistant fabrics, such as Kevlar, that are
strategically overlaid or inset for added protection in areas of excessive wear
and tear, such as shoulders and elbows.  The Company's skiwear collections are
reviewed annually and are redesigned, as appropriate, to add innovative
features.*  For 1997, the Company has introduced 59 new skiwear products.

PRODUCT DESIGN AND DEVELOPMENT

The Company's goal is to offer the most technically advanced products in the
world that establish the industry standard in each of the Company's product
categories.*  To remain on the leading edge of product design and materials
technology, the Company continually evaluates trends, monitors the needs and
desires of its consumers and works with its materials suppliers to develop new
materials and products and enhance product designs.* 

The Company regularly reviews its product lines and actively seeks input from a
variety of sources.  At the forefront of the product development effort is a 25
-member product development team, which includes experts in textiles and design
engineering.  This team, which is responsible for overseeing testing of designs
and introducing new outerwear, outdoor equipment, skiwear and Tekware, is
organized along major product lines, each with a product manager.  The product
development team works with staff designers and also with outside contract
designers.  The Company's teams of climbers, explorers and extreme skiers also
are important components of the Company's product design and development effort.

The product development cycle, from initial design to introduction, can take
from 12 to 18 months, with tents and backpacks requiring more time than other
products.  A new product may be produced in several prototypes before being
submitted for testing.  New designs are tested by the Company's teams of
climbers, explorers and extreme skiers and by in-house and independent
laboratories, as well as by The North Face personnel.  The Company maintains a
materials testing laboratory to execute a variety of tests, including water
resistance, air permeability, tear strength and abrasion resistance.

The Company's products are designed with materials that are essential to their
technical performance.  Most of these materials are developed in collaboration
with major suppliers, such as W. L. Gore & Associates, Inc., DuPont, Hoechst,
Malden Mills, Burlington Industries, Inc. and Mitsui Textiles.  The Company
generally does not have written agreements with these suppliers.  The Company
works closely with these suppliers to develop high-performance materials that
result in lighter, stronger and more efficient products.  With an innovative
material, the Company generally seeks proprietary use or an exclusivity period,
usually one to two years, after which the supplier is free to make the material
generally available. These suppliers frequently provide much of the funding for
research and development of the materials they are developing for the Company,
and often contribute to the costs of promoting products incorporating their
material.* 

MARKETING AND PROMOTION

The Company's goal is to increase brand awareness by projecting a technical,
extreme and authentic image that appeals to professionals and serious outdoor
enthusiasts as well as to broader segments of the population.*  The Company
conveys an extreme and highly technical image by featuring world-class climbers,
explorers, skiers and snowboarders using the Company's products on high
altitude, polar or backcountry expeditions.  The Company's marketing materials
utilize language and images that, while directed to the extreme athlete, also
create an emotional connection with broader segments of the population.


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Management believes that the Company has obtained a high level of brand
awareness and loyalty from the extreme users of its products.  In order to
bolster the loyalty of these individuals and to further enhance its extreme
image, the Company is increasing its support of selected high altitude and polar
expeditions and its teams of climbers, explorers and skiers.*  The North Face-
Registered Trademark- products have been the brand choice of many of the world's
most challenging expeditions for over 30 years.  A small sampling of these
expeditions includes the 1969 Arctic Institute of North America Altitude
Expedition; 1978 American Woman's Himalayan Expedition; 1987 International K-2
Expedition; 1989 Trans-Antarctica Expedition; 1992 American Gasherbrum IV
Expedition; 1994 Sagmartha Environmental Expedition; 1995 Ak-Su Kyrgyzstan
Expeditions; and 1996 Shipton Spire Expeditions.

Recognizing that the product choices of professional athletes influence consumer
preferences, the Company employs and/or has entered into contracts with several
world-class professional climbers, including Conrad Anker, Kitty
Calhoun-Grissom, Greg Child, Lynn Hill, Alex Lowe and Jay Smith; extreme skiers
Scot Schmidt and Rob and Eric DesLauriers; and backcountry snowboarders Jim and
Bonnie Zellers.  These athletes are essential to the Company's product design
and testing.  In addition, they participate in promotional activities on behalf
of the Company, including demonstrations and appearances at exhibitions, trade
shows, retailer clinics and promotional events, and appear in photos to promote
the Company in catalogs, advertisements, posters and videos.  The Company has
entered into relationships with the Professional Ski Instructors of America and
with the National Ski Patrol pursuant to which each of these organizations
endorses the Company's skiwear.

In 1994, the Company began an ongoing comprehensive consumer advertising
campaign in outdoor and ski publications.  The Company's advertisements appear
in magazines such as OUTSIDE, CLIMBING MAGAZINE, BACKPACKER and POWDER.  The
Company also has received editorial coverage in a wide range of general interest
publications, including VOGUE, ELLE, ESQUIRE, GQ and THE NEW YORK TIMES.  The
Company provides a wide assortment of point of purchase advertising support to
retailers, including catalogs, descriptive product hang tags and visual aids. 
Many of these point of purchase marketing tools are integrated into the
Company's newly developed Summit Shops.  The Company also promotes sales by
operating sizable product displays at three industry trade shows, two of which
are held in the Spring and one in the Fall of each year.  In 1996, the Company
incurred expenditures for advertising and promotional activities which were
approximately 4% of net sales.
          
SUMMIT SHOPS

In the third quarter of 1996, the Company introduced Summit Shops, year-round
concept shops dedicated to The North Face-Registered Trademark- products located
within certain of its wholesale customers' stores.  Summit Shops are intended to
increase sales at existing specialty retailers by offering an attractively
designed, professionally merchandised, dedicated selling space featuring a broad
array of The North Face-Registered Trademark- products.*  The objectives of the
Summit Shops are to (i) have dedicated year-round selling floor space within
selected specialty retailers' stores; (ii) help the Company's specialty
retailers compete against mainstream apparel retailers; (iii) create a repeat
customer base; (iv) modernize the specialty retailers' approach to merchandising
The North Face-Registered Trademark- products; (v) provide the ability to
closely monitor retail sell-through at specialty retailers; and (vi) maintain a
consistent product assortment at the specialty retail level.*  The Company has
designed the appearance of each Summit Shop, including its fixtures, merchandise
displays, descriptive placards and graphic images, to increase consumer
awareness of The North Face-Registered Trademark- brand and image. The Company
provides merchandising support for the Summit Shops, while the specialty
retailer provides the customer service and sales personnel.  The Company also
provides sales and product training for the specialty retailers' personnel who
work in the Summit Shops.  Each Summit Shop is expected to follow certain
operational guidelines and maintain minimum inventory levels.

In the first half of 1996, a major outdoor retail chain opened The North Face-
Registered Trademark- concept shops, the precursors to Summit Shops, in 14 of
its stores.  Based on the initial performance of the 14 concept shops, an
additional 28 Summit Shops were opened in the Company's wholesale customer
stores during the last half of 1996.  These shops averaged approximately 550
square feet in size.  The Company expects to open a minimum of 100 additional
Summit Shops in 1997. *  While the Company expects that an average 550 square
foot Summit Shop will require a total investment for furniture and fixtures of
approximately $35,000, all or a substantial majority of which will be provided
by the Company, there can be no assurance that Summit Shops will not require
substantially more total capital investment.*

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SELECTIVE DISTRIBUTION

To preserve the integrity of The North Face-Registered Trademark- image and
reputation, the Company currently limits its distribution to retailers that
market products that are consistent with the Company's technical standards and
that provide a high level of customer service and technical expertise.  The
Company currently sells its products to a select group of specialty
mountaineering, backpacking and skiing retailers, premium sporting goods
retailers and major outdoor specialty retail chains.  The Company does not sell
its products to national general sporting goods chains or to discount stores. 
The Company sells its products in the United States to approximately 840
wholesale customers, representing an estimated 1,200 store fronts.  In Canada,
the Company sells its products to approximately 210 wholesale customers,
representing an estimated 250 store fronts, and in Europe, it sells to
approximately 450 wholesale customers, representing an estimated 750 store
fronts.  Major customers of the Company include Recreational Equipment Inc. and
Eastern Mountain Sports, Inc.  

No single customer accounted for more than 10% of net sales in 1996.  Certain
information concerning preseason orders, inventory, seasonality, quarterly
fluctuation of operating results, government orders and working capital is set
forth under the captions "General," "Quarterly Data and Seasonality" and
"Liquidity and Capital Resources" in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included in the 1996 Annual
Report, and is incorporated herein by reference.

While the Company will continue to add selected wholesale customers, it
anticipates focusing primarily on increasing sales at existing wholesale
customers.*  To accomplish this, the Company developed Summit Shops and
established a new core inventory replenishment program.  The Company believes
that Summit Shops will increase sales by increasing selling space devoted to,
and improving the merchandising of, The North Face-Registered Trademark-
products.*  By increasing availability of the Company's best selling products,
the Company believes its new core inventory replenishment program will enable it
to provide consistent product flow to both the Summit Shops and its other
wholesale customers.*  The Company expects the new core inventory replenishment
program to increase the sales of its strongest selling items by increasing the
Company's ability to meet strong reorder demand.*  

The Company's products are sold to wholesale customers in the United States by
its employee sales representatives, and in Canada and Europe by independent
sales representatives.  Sales representatives conduct in-store clinics to
educate sales personnel on the technical qualities and uses of the Company's
products, provide customer support, review each retail account on a periodic
basis and assist the Company in forecasting levels of product needs.  Sales
representatives in Canada and Europe are paid on a commission basis. 

The Company maintains a specialty retailer and customer service department to
handle orders and consumer inquiries, as well as a warranty department to handle
the repair or replacement of defective or damaged merchandise.  All of the
Company's products (other than those sold through the Company's outlet stores)
are covered by a lifetime warranty.  Defective or damaged products returned to
the Company generally are replaced or repaired within 10 to 14 days of receipt. 
Warranty expenses in 1996 were approximately 1% of net sales.  Although the
Company does not expect warranty expenses to increase as a percentage of net
sales, there can be no assurance that such expenses will not increase
significantly in the future as a percentage of net sales.*  
          
The Company currently distributes in the United States ("U.S.") primarily out of
a 146,500 square foot facility in San Leandro, California, of which
approximately 80,000 square feet is dedicated for distribution.  This facility
also houses the Company's executive and administrative headquarters.  The
Company has a secondary U.S. distribution facility in Richmond, California,
consisting of approximately 106,000 square feet.  In June 1997, the Company will
move its main distribution center to a 250,445 square foot facility in
Vacaville, California.*  The San Leandro distribution facility will operate as a
secondary facility, and the lease in Richmond, California will terminate in
April 1997.*  In Canada, the Company operates a 22,200 square foot distribution
and administrative facility in Toronto, Ontario, and in Europe, the Company
operates a 77,200 square foot distribution and administrative facility in Port
Glasgow, Scotland.  The majority of the Company's products are shipped by UPS
and common carriers.

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RETAIL OPERATIONS

RETAIL STORES.  The Company's retail operations are an important component of
its marketing and product development strategies and provide a distinctive
environment in which to merchandise and sell The North Face-Registered
Trademark- product line.  Located primarily in high-end retail shopping
districts and regional shopping malls, these stores carry a broad range of The
North Face-Registered Trademark- outerwear, equipment, skiwear and Tekware as
well as complementary products such as footwear and accessories from other
manufacturers.  As a result of the Company's ability to control the visual
presentation and product assortment in its retail stores, the stores help build
brand awareness and introduce consumers to a broad range of The North Face-
Registered Trademark- products.  These stores also provide a means for the
Company to test the appeal of new products and merchandising techniques.  By
working closely with store personnel, many of whom are outdoor enthusiasts, the
Company also obtains customer feedback that influences product design and
development.

The following table shows the approximate retail selling space at each of the
Company's nine retail stores:

                                     Approximate
                                       Selling          Year
     Location                      Square Footage      Opened
     --------                      --------------      ------
     Denver, CO..................       8,500           1973
     Boulder, CO.................       3,400           1982
     Seattle, WA.................       4,600           1985
     Oakbrook, IL................       3,000           1991
     San Francisco, CA...........       8,100           1991
     Schaumberg, IL..............       3,400           1991
     Costa Mesa, CA..............       5,500           1993 
     Palo Alto, CA...............       7,800           1994 
     Chicago, IL.................      12,000           1995

Although the Company considers its retail stores to be an important aspect of
its business strategy, the Company currently has no plans to open additional
retail stores, particularly given its focus on the introduction of additional
Summit Shops in 1997.*  The Company believes that Summit Shops will provide many
of the same benefits as its Company-operated retail stores and that the
substantially reduced operational and financial commitments associated with
Summit Shops will result in a higher return on investment.*

OUTLET STORES.  The Company also operates three outlet stores, located in
Berkeley and San Francisco, California and Freeport, Maine.  The outlets serve
primarily as an effective means to liquidate discontinued merchandise.

INTERNATIONAL OPERATIONS

International sales accounted for approximately 26% of the Company's net sales
in 1996.  In 1996, the Company implemented an integrated world-wide approach to
product development, sourcing and marketing in order to reduce costs, ensure
consistent worldwide operations and create a unified global brand.  By offering
the same product lines and promoting the same extreme image in catalogs,
advertising and point of purchase materials, the Company has positioned The
North Face-Registered Trademark- brand in Europe consistently with the brand
image in the United States and Canada.  Outside the United States, The North
Face products are sold to wholesale customers in Europe and Canada through the
Company's wholly-owned subsidiaries and by a licensee in Hong Kong and Macao. 
In Japan and Korea, substantially all of the Company's trademarks are owned by
Kabushiki Kaisha Goldwin ("Goldwin").

Financial information concerning the Company's foreign and domestic operations
by geographical area is included in Note 13 to Consolidated Financial Statements
in the 1996 Annual Report and is incorporated herein by reference.

EUROPE.  The Company believes that it is currently well positioned in Europe to
take advantage of the same industry trends that are occurring in the United
States.*  Although the Company has operated in Europe for more than 13 years

                                       8
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and believes it is recognized as a leader in the design, marketing and 
distribution of highly technical outdoor apparel and equipment, only recently 
has it begun to devote additional resources in Europe to increase sales.*  The
Company's European operations are headquartered in Scotland.  The Company 
distributes its products directly to approximately 450 wholesale customers 
representing an estimated 750 store fronts throughout Europe.  Its primary 
markets are the United Kingdom, Germany, Italy, France, Spain, Sweden, 
Denmark and The Netherlands.  Independent sales agents reporting to the 
Company's sales director are responsible for sales in each country.

CANADA.  The Company's Canadian operations are headquartered in Toronto,
Ontario, and include a distribution center and a customer and warranty service
center. Since early 1995, the Company has sold its products in Canada through
independent sales representatives to approximately 210 wholesale customers
representing an estimated 250 store fronts in Canada, primarily in British
Columbia, Ontario and Quebec.  Prior to 1995, the Company's products were sold
in Canada through a licensee.  During 1995, the Company undertook the following
initiatives in Canada: (i) established a sales, sales support, finance and
distribution facility in Toronto; (ii) hired a general manager to head the
Canadian operations; (iii) significantly expanded the available product
categories; and (iv) integrated the marketing and sourcing efforts with those of
the U.S. operations.  The Company believes that additional growth opportunities
exist in the Canadian market.* 

ASIA.  In Japan and Korea, substantially all of the Company's trademarks are
owned by Goldwin, a leading manufacturer and distributor of high-end sports and
outdoor apparel and equipment.  The North Face-Registered Trademark- is the
leading high-performance outdoor brand in Japan.  The Company and Goldwin work
closely together in the areas of product design, sourcing and brand imaging. 
The Company believes that Goldwin shares the Company's strategy of building a
unified global brand.  The Company benefits from this relationship by selling
products made in the United States to Goldwin and by charging an administration
fee for orders which Goldwin adds to the Company's production in China and
Southeast Asia.  In Hong Kong and Macao, the Company's products are sold through
a licensee, Mitsui & Co., Ltd. ("Mitsui").  The Company plans to capitalize on
its growing worldwide strength by exploring sales opportunities in other Asian
and Pacific Rim countries.*  

SOURCING AND MANUFACTURING

The Company sources virtually all of its products through approximately 50
unaffiliated manufacturers in North America and Asia, including Hong Kong,
China, Taiwan, Korea, Indonesia, Bangladesh, Thailand and the Philippines.  The
Company's European subsidiary operates a small manufacturing factory in Scotland
which accounts for a minor portion of the Company's total production. The
Company has implemented a global sourcing strategy that is expected to enable it
to achieve greater economies of scale, improve gross margins and maintain
uniform quality standards for its products.*  The Company believes that it
enjoys good relationships with its suppliers and manufacturers and has the
ability to secure the necessary capacity to meet increased demand for its
products.*   

To ensure that products manufactured by others are consistent with its
standards, the Company manages all key aspects of the production process,
including establishing product specifications, selecting the materials to be
used to produce its products and the suppliers of such materials, and
negotiating the prices for such materials.  The Company maintains a staff of
quality control specialists which conducts on-site inspections throughout the
production process, including at the mills before the fabrics are shipped, at
the factories as the products are made and, finally, before the finished
products are shipped.

The Company currently is engaged primarily in a two season, wholesale business,
Spring (January to June) and Fall (July to December).  Wholesale customers place
preseason orders from one to five months prior to the beginning of the season
for deliveries throughout the season.  Reorders are taken throughout the season
and are based on availability.  With the introduction of the Company's new
Tekware line and Summit Shops, the Company anticipates that it increasingly will
be supplying its products on a year-round basis.*  The Company has recently
introduced a core inventory replenishment program, under which it maintains
stocks of key products. 

                                       9
<PAGE>


The Company's Merchandise Forecasting and Planning Department analyzes
information which it receives from the Company's various sales arms and develops
forecasts for the Company's products.  These forecasts are regularly updated to
reflect advance orders and reorders and are turned into production quantities. 
The Company's Product Acquisition Department, in turn, issues purchase orders to
the Company's unaffiliated manufacturers. Unaffiliated manufacturers purchase
the materials specified by the Company and manufacture and ship the products to
the Company.  The Company's unaffiliated manufacturers sell finished products to
the Company on an FOB basis and are at risk for the quality and timely delivery
of the products.  In 1996, approximately 35 to 40% of the Company's total
production requirements were financed with letters of credit; the balance is
purchased under open terms ranging from 14 to 60 days.

MANAGEMENT INFORMATION SYSTEMS

The Company believes that a high level of computerization is essential to
maintain and improve its competitive position.  The Company's management
information and electronic data processing systems consist of a full range of
retail, financial, distribution and merchandising systems.  The Company
currently anticipates spending a total of approximately $2.0 to $2.5 million in
1997 to upgrade its management information systems, with particular emphasis in
sourcing, core inventory replacement and forecasting, and believes that once in
place, the upgraded systems, along with routine upgrades, will be sufficient to
accommodate the Company's anticipated growth in sales and planned expansion for
the foreseeable future.*   However, there can be no assurance that any upgrades
of its management information systems will be completed in a timely manner, that
any such upgrades will be adequate to meet the needs of the Company or that
these upgrades will not strain the Company's financial resources. 

COMPETITION

The markets for the Company's products are highly competitive, and the recent
growth in these markets has encouraged the entry of many new competitors as well
as increased competition from established companies.  Although the Company
believes that it does not compete directly with any single company with respect
to its entire range of products, within each product category the Company has
significant competitors.  In addition, the Company has recently begun
experiencing increased competition from major brand name apparel companies who
are attempting to duplicate the Company's styles, particularly in the area of
functional sportswear.  These competitors are larger and have significantly
greater financial, marketing and other resources than the Company.  While the
Company believes that it has been able to compete successfully because of its
brand image and recognition, the broad range and quality of its products, and
its selective distribution and customer service policies, including the lifetime
warranty that its products carry, there can be no assurance that the Company
will be able to maintain or increase its market share in the future.  The
failure of the Company to compete successfully would materially and adversely
affect the Company's business and results of operations.  

TRADEMARKS AND LICENSING

The Company considers its trademarks to be among its most valuable assets and
has numerous trademark registrations in the United States, Europe and other
foreign countries.  Among the Company's trademarks are The North Face-Registered
Trademark-, 'N' Design logo-Registered Trademark-, Extreme-Registered Trademark-
, Tekware-TM- , Steep Tech-Registered Trademark-, Quick Pitch-TM- , Hydrenaline-
TM- , Search and Rescue-TM- and VaporWick-TM- .  Because of the popularity of
many of the Company's products and their strong brand identity and distinctive
design, The North Face-Registered Trademark- brand in recent years has
frequently been subject to unauthorized copying and mislabeling of imitation
goods.  The Company maintains an aggressive program of trademark enforcement and
cooperation with domestic and foreign customs officials and other authorities,
and will continue to vigorously defend its trademarks against infringement.* 

Currently, the Company has licensed its trademarks to Mitsui which markets
Company-designed products under The North Face-Registered Trademark- name in
Hong Kong and Macao.

In June 1994, Goldwin purchased from the Company substantially all of the
trademarks and trademark applications owned by the Company in Japan and Korea
and obtained the exclusive right to sell and distribute products under the
Company's trademarks in Japan and Korea.  At the same time, the Company entered
into a marketing arrangement with

                                       10
<PAGE>

Goldwin that ensures that brand, product image and distribution strategies 
are synchronized.  The Company benefits from this relationship by selling 
products made in the U.S. to Goldwin and by charging an administrative fee 
for orders which Goldwin adds to the Company's production in China and 
Southeast Asia.

EMPLOYEES

As of December 31, 1996, the Company had 572 employees, of which 419 were
employed in the United States, 141 in Europe and 12 in Canada.  None of these
employees is currently covered by collective bargaining agreements.  The Company
believes that its relations with its employees are good.

FACTORS THAT MAY AFFECT OUR BUSINESS.

CONSUMER PREFERENCES. Consumer demand for the Company's products may be
adversely affected if consumer interest in outdoor activities does not grow or
declines.  If the Company is unable to respond successfully to changes in
consumer preferences, or if consumer preferences shift toward competing products
or away from the Company's product categories altogether, the Company's business
would be adversely affected.  The Company cannot assure future growth or
consumer demand for its products.

MANAGING GROWTH.  If the Company's business grows, the Company may have
increased difficulties in managing product design, hiring, marketing,
distribution, management information and other resources, and in obtaining
supplies, manufacturing services and working capital.  The Company's future
profitability will be critically dependent on its ability to achieve and manage
potential future growth effectively. 

WHOLESALE STRATEGY.  The Company's wholesale customers consist almost
exclusively of specialty outdoor product retailers.  The Company cannot assure
that its existing customers will increase their purchases of the Company's
products, that future preseason wholesale orders will increase, or that the
Company will be able to fill reorders during each season.  Because the Company
expects its wholesale business to constitute an increasing percentage of total
sales going forward, overall gross margins may continue to decline in the
future.  The Company's wholesale strategy also depends on its ability to achieve
increased sales through its Summit Shop program.   Risks of this program include
sourcing and managing higher inventory levels, funding all or most of the cost
of the Summit Shop fixtures without assurance of additional sales and profits,
and the need to supply products that maintain consumer demand on a year round
basis.  There can be no assurance that additional Summit Shops will be opened in
a timely manner or that their cost or performance will meet the Company's
expectations.  If the Summit Shop program is unsuccessful, the Company risks
writeoffs of inventory and fixtures that could have a material adverse effect on
the Company's business.  The Company believes that the success of its Summit
Shop program will be highly dependent on market acceptance of its recently
introduced Tekware-TM- line of products.

DEPENDENCE ON NEW PRODUCTS.  To continue its growth, the Company must
successfully introduce new products and improvements to existing products on an
ongoing basis.  Risks of new product introductions include targeting new markets
involving more casual outdoor uses, offering products in wider price ranges,
product obsolescence, increased costs and competition, possible consumer
rejection of new products or styles and possible dilution of the Company's
product image.  In 1996, the Company introduced "Tekware-TM-," a line of
synthetic outdoor apparel.  The Company's limited experience in marketing casual
apparel, limited distribution channels, and possible consumer resistance to
synthetic fabrics could result in slow sales of Tekware-TM-.

RELIANCE ON UNAFFILIATED MANUFACTURERS.  The Company currently relies on
approximately 50 unaffiliated manufacturers to produce nearly all of its
products, with ten of the manufacturers producing approximately 75% of the
Company's products for 1996.  The Company has no long-term contracts with its
manufacturing sources, and it competes with other companies for production
facilities and import quota capacity.  Any disruption in the Company's ability
to obtain manufacturing services could have a material adverse effect on the
Company's business.  The Company has occasionally received, and may in the
future receive, shipments of products from manufacturers that fail to conform to
the Company's quality control standards.   The Company established a core
inventory replenishment program in October 1996 to

                                       11
<PAGE>

facilitate reorders of core products, and cannot assure that this program 
will meet reorder requirements or avoid excess inventory.

KEY SUPPLIES.  Certain important materials used in the Company's products are
only available from one or a limited number of independent suppliers.  The
Company's future success may depend upon the Company's continued ability to
purchase supplies of technically advanced textiles developed by third parties. 
The Company cannot assure that it will be able to obtain in the future adequate
supplies of technically advanced materials or that desired purchase terms or
other benefits of past purchases, such as suppliers' funding of development
costs and co-op advertising arrangements, will continue.

FLUCTUATIONS IN SALES.  Sales of the Company's products historically have
fluctuated due to external conditions such as weather and economic recessions or
other conditions which reduce consumer spending.

INTERNATIONAL OPERATIONS.   The Company's business is subject to the risks
generally associated with doing business abroad.  The Company imports more than
50% of its merchandise from contract manufacturers located outside of the United
States, primarily in the Far East.   A significant portion of the Company's
products is produced in China.  From time to time, the U.S. government has
considered imposing punitive tariffs on apparel and other exports from China. 
The imposition of any such tariffs could disrupt the supply of the Company's
products, which could have a material adverse effect on the Company's results of
operations.

COMPETITION AND TRADEMARKS.  The Company faces intense competition from major
brand name apparel companies, other large companies, and smaller businesses
specializing in outdoor products.  The Company owns and uses a number of
trademarks, some of which may be important in maintaining or creating a
competitive advantage and consumer demand.  Certain competitors in the United
States and abroad have copied and may in the future copy certain of the
Company's trademarks and designs.  The Company is also aware of certain
counterfeiting of the Company's products.   Without authorization by the
Company, a third party has filed an application in China to register as a
trademark the Chinese characters for "North Face" and a copy of the Company's
"N" design.  Unless successfully opposed, this application could result in
material adverse consequences to the Company's business.  There is no assurance
that the Company's efforts to stop or reduce the copying or counterfeiting of
its trademarks or products will be successful, that the Company's trademarks
will not violate the proprietary rights of others, or that the Company will be
able to avoid or successfully defend challenges to its trademarks or other
intellectual property in the United States or abroad.

KEY PERSONNEL.  The Company recently announced a shift in its executive
responsibilities pursuant to which Marsden S. Cason was named Chairman of the
Board of Directors and William N. Simon was named Chief Executive Officer in
addition to his role as President.  This change was due in part to health
considerations affecting Mr. Cason.  The unanticipated loss of one or more
current senior executives or key employees could have a significant adverse
effect on the Company's business.   

PRODUCT AND WARRANTY LIABILITY.  The Company's products are used often in severe
weather conditions.  In 1997 the Company began selling portaledges used as
sleeping platforms in big wall rock climbing.  There is no assurance that
insurance maintained by the Company will cover possible future losses from
product liability claims.  The Company maintains a warranty reserve for the
lifetime warranty offered on its products, but cannot assure that future claims
will not exceed this reserve.  Further, in the event that the Company
experiences problems with product quality or reliability, its reputation as a
provider of high quality products could suffer, which could have a material
adverse effect on the Company's business.

STOCK MARKET RISKS.  The trading price of the Company's Common Stock has
fluctuated significantly since the Company's initial public offering in July
1996, and may fluctuate in the future as a result of many factors, including the
Company's operating results, new products introduced by the Company or its
competitors, market conditions for the Company's products, changes in earnings
estimates by analysts, results reported by the Company which are more or less
than estimates by analysts, and speculation in the trade or business press. The
trading price may also be affected by retail industry, stock market, or economic
factors unrelated to the Company's operating performance.  Future sales of

                                       12
<PAGE>

substantial amounts of Common Stock by existing stockholders may also adversely
affect prevailing market prices for the Common Stock and could impair the
Company's ability to raise equity capital in the future.  As of March 17, 1997,
the Company's directors, officers and certain other affiliates beneficially
owned approximately 45% of the outstanding shares of the Company's Common Stock.


EXECUTIVE OFFICERS OF THE NORTH FACE, INC.

      Name                   Age                     Position
      ----                   ---                     --------
Marsden S. Cason              53             Chairman and Director 
William N. Simon              49             Chief Executive Officer, President
                                                and Director 
Roxanna Prahser               38             Chief Financial Officer 
Carlo Armenise                47             Vice President of Operations
Todd Katz                     34             Vice President of Sales
Tucker Hacking                41             Vice President of Product
                                                Acquisitions
Jack A. Boys                  38             Vice President of Marketing
Roger Kase                    49             Vice President of Product
                                                Development 

Mr. Cason has been Chairman of the Company since February 1997, served as Chief
Executive Officer of the Company from June 1994 to February 1997, and served as
a director since June 1994.  Mr. Cason joined the Company's predecessor in
January 1993 as President and director and served as a director and executive
officer of several affiliates of the predecessor.  Prior to joining the
Company's predecessor, from May 1991 through January 1993, Mr. Cason was the
Chief Executive Officer of Carol Management Company and Doral Resort Hotels, an
owner and manager of condominiums, hotels and conference centers.  Prior to May
1991, Mr. Cason was involved in various business ventures as a chief executive
officer.

Mr. Simon has been Chief Executive Officer of the Company since February 1997,
President of the Company since December 1995, and a director of the Company
since June 1995. From May 1988 through June 1994, Mr. Simon served as the
Chairman of the Board of the Company's predecessor and was Vice Chairman of the
Company from June 1994 to December 1995.  From November 1978 through June 1994,
Mr. Simon was Chairman and Chief Executive Officer of Odyssey Worldwide Holdings
B.V. ("Odyssey"), a designer and manufacturer of high-end sports and outdoor
apparel, and an executive officer and director of several other Odyssey
affiliates.  Mr. Simon has been involved in the design, manufacturing and sales
of outdoor clothing and equipment for over 26 years.  In January 1993, Odyssey
and certain holding companies affiliated with Odyssey filed for protection in
the United States under Chapter 11 of the U.S. Bankruptcy Code.   In September
1994, Mr. Simon filed a petition under Chapter 7 of the U.S. Bankruptcy Code
and in January 1995 was granted a discharge by the bankruptcy court and the
proceeding was dismissed.  Mr. Simon personally had guaranteed substantially all
of the indebtedness of Odyssey and its affiliated companies and his bankruptcy
filing was made in order to terminate his personal liability for these corporate
obligations.

Ms. Prahser has been Chief Financial Officer of the Company since January 1996. 
Ms. Prahser served as the Vice President of Finance for the Company from May
1995 through January 1996 and as Director of Finance for the Company and its
predecessor from March 1993 through May 1995.  Prior to joining the Company's
predecessor, Ms. Prahser spent 12 years at Arthur Andersen & Co., where she was
an audit manager.

Mr. Armenise has been Vice President of Operations since March 1997.  Mr.
Armenise served as the Vice President of Retail for the Company from April 1996
through March 1997.  Prior to joining the Company, Mr. Armenise was with Coach
Leatherware Inc., a manufacturer, wholesaler and retailer of leather goods and
apparel, from September 1992 through April 1996. His last position with Coach
was as Director of Full Price Stores from June 1994 through April 1996.  Prior
to that, Mr. Armenise was with Gucci America, Inc.  from June 1977 through
September 1992 and served as its West Coast Assistant Regional Manager from
January 1990 through September 1992.  Mr. Armenise has 19 years of experience in
the specialty retail and apparel industries.

Mr. Katz has been Vice President of Sales for the Company since January 1997. 
From October 1994 to December 1996, Mr. Katz managed regional sales for the
Company as an independent contractor in the northwestern United States.

                                       13
<PAGE>

From October 1988 to October 1994, Mr. Katz served as a regional sales 
manager for W. L. Gore & Associates, Inc., manufacturer of 
Gore-Tex-Registered Trademark-fabrics and other leading outdoor industry 
material technologies.

Mr. Hacking has been Vice President of Product Acquisitions for the Company
since April 1996 and Director of Product Acquisitions for the Company and its
predecessor from April 1993 through April 1996.  From January 1990 to April
1993, Mr. Hacking owned and operated TTH Enterprises, Inc., a company
specializing in the sports apparel industry.  Previously, Mr. Hacking spent over
10 years with Adidas in Europe and the United States, last serving as the
general manager of operations and sourcing for Adidas America, Inc.  Mr. Hacking
has over 18 years of experience in the apparel industry.

Mr. Boys joined the Company as Vice President of Marketing in March 1996.  From
December 1993 to March 1996, Mr. Boys was Vice President of Marketing for Avia
Group International, Inc., a manufacturer of athletic footwear, and from August
1992 to December 1993 he was Vice President of Marketing for Le Coq Sportif
International, an athletic footwear and apparel manufacturer.  Prior to August
1992, Mr. Boys spent over 10 years with Converse Inc., an athletic footwear
company, where he held various senior marketing management positions.

Mr. Kase joined the Company as Vice President of Product Development in May
1995.  From September 1993 through May 1995, he was Chief Operating Officer for
Cary Children's Clothing and from April 1991 through July 1993, he was Vice
President --Apparel Division for Sam & Libby Inc., a manufacturer of footwear. 
Mr. Kase has over 20 years of experience in the apparel industry in both design
and operations, including 10 years as an executive with Esprit de Corp., a
manufacturer of women's clothing.

ITEM 2.  PROPERTIES.
The principal executive and administrative offices of the Company are 
located at 2013 Farallon Drive, San Leandro, California.  The Company has 
recently signed a lease in Vacaville, California, which will be its primary 
distribution facility.* The lease for space used as a distribution center in 
Richmond, California, expires in April 1997.  The general location, use and 
approximate size of the Company's principal properties, all of which, other 
than the facility in Scotland, are leased, are set forth below:

                                                              Approximate Gross
 Location                           Use                              Square Feet
 --------                           ---                              -----------

San Leandro, CA          Executive and administrative offices and       146,500
                            distribution center 
Vacaville, CA            Distribution Center (commencing June 1997)     250,445
Richmond, CA             Distribution Center (through April 1997)       106,000
San Francisco, CA        Retail store                                    12,300
Palo Alto, CA            Retail store                                    10,700
Costa Mesa, CA           Retail store                                     7,100
Seattle, WA              Retail store                                     6,000
Denver, CO               Retail store                                    17,000
Boulder, CO              Retail store                                     4,300
Chicago, IL              Retail store                                    15,200
Oakbrook, IL             Retail store                                     4,000
Schaumberg, IL           Retail store                                     5,000
Berkeley, CA             Outlet                                          14,200
San Francisco, CA        Outlet                                          10,000
Freeport, ME             Outlet                                          10,000
Port Glasgow, Scotland   European headquarters, distribution             77,200
                            center and manufacturing facility 
Brampton, Ontario        Canadian headquarters and distribution          22,200
                            center

                                       14
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS.   

     None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     Not applicable.

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS.

      The Company's Common Stock is listed on the Nasdaq National Market and
trades under the symbol "TNFI."  At March 17, 1997, there were approximately 51
stockholders of record.  Information concerning certain dividend restrictions
under the Company's credit facility is incorporated in this report by reference
from page 19 of the 1996 Annual Report.  The Company does not anticipate paying
any dividends in the foreseeable future.  Following are the high and low closing
prices for the Company's Common Stock for the third and fourth quarters of 1996:

                               Q3 1996        Q4 1996
                               -------        -------
                    High       $32            $29 3/4
                    Low        $15 1/4        $16


ITEM 6.  SELECTED FINANCIAL DATA.

     Selected financial data for the Company is incorporated in this report by
reference from page 1 of the 1996 Annual Report.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS.

     Management's Discussion and Analysis of Financial Condition and Results of
Operations is incorporated in this report by reference from pages 16 through 21
of the 1996 Annual Report.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     The consolidated financial statements of the Company, together with the
report thereon of Deloitte & Touche LLP, independent auditors, are incorporated
in this report by reference from pages 22 through 34 of the 1996 Annual Report.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

     None.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     Information concerning the directors of the Company and compliance with
Section 16(a) of the Securities Exchange Act of 1934 is incorporated in this
report by reference from the text under the captions "Proposal 1 - Election of
Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance"
included in the Company's Proxy 

                                       15
<PAGE>


Statement for the Annual Meeting of Stockholders on May 13, 1997.  Information
concerning the executive officers of the Company is set forth under the caption
"Executive Officers of The North Face, Inc." in Item 1 of Part I of this report.

ITEM 11.  EXECUTIVE COMPENSATION.

     Information concerning executive compensation is incorporated in this
report by reference from the text and tables under the caption "Executive
Officer Compensation" included in the Company's Proxy Statement for the Annual
Meeting of Stockholders on May 13, 1997.  Information concerning compensation of
directors is incorporated in this report by reference from the text under the
caption "Proposal 1 - Election of Directors" included in that proxy statement.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     Information concerning security ownership of certain beneficial owners and
management is incorporated in this report by reference from the text and table
under the caption "Stock Ownership of Certain Beneficial Owners and Management"
included in the Company's Proxy Statement for the Annual Meeting of Stockholders
on May 13, 1997.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     Information concerning certain relationships and related transactions 
with executive officers, directors and security holders known to the Company 
to own of record more than 5% of the Company's Common Stock is incorporated 
in this report by reference from the text under the captions "Executive 
Officer Compensation --Compensation Committee Interlocks and Insider 
Participation" included in the Company's Proxy Statement for the Annual 
Meeting of Stockholders on May 13, 1997.

                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

     (a)(1)  The following consolidated financial statements of The North Face,
Inc. and independent auditors' report are incorporated in this report by
reference from the Company's 1996 Annual Report to Stockholders filed as Exhibit
13 hereto:

          Consolidated Balance Sheets
          Consolidated Statements of Operations
          Consolidated Statements of Cash Flows
          Consolidated Statements of Stockholders' Equity
          Notes to Consolidated Financial Statements
          Independent Auditors' Report

     (2) Financial Statement Schedules

          All schedules are omitted because of the absence of the conditions
under which they are required or because the required information is set forth
in the consolidated financial statements and notes thereto.

     (3)   Exhibits

Exhibit No.                             Description

3.1(2)    Amended and Restated Certificate of Incorporation of The North Face,
          Inc.

3.2(A)(1) Amended and Restated By-laws of The North Face, Inc.


                                       16
<PAGE>

4.1(1)    Specimen Common Stock Certificate of The North Face, Inc.

10.1(1)   Subordinated Note and Common Stock Purchase Agreement, dated as of 
          June 7, 1994, between TNF Holdings Company, Inc.,* and Whitney 
          Subordinated Debt Fund, L.P., as amended by Amendment No.  1, dated 
          as of March 1, 1995, and Amendment No.  2, dated as of March 27, 
          1996.

10.1A(1)  Subordinated Promissory Note due June 7, 2001 (issued pursuant to 
          the Subordinated Note and Common Stock Purchase Agreement, dated as 
          of June 7, 1994, as amended, included in 10.1).

10.1B(1)  Form of Amendment No.  3, dated as of , 1996, to Subordinated Note 
          and Common Stock Purchase Agreement (included in Exhibit 10.1).

10.1C(1)  Form of Amended and Restated Promissory Note due June 7, 2001 
          (included in Exhibit 10.1A).

10.2(1)   Preferred Stock Purchase Agreement, dated as of June 7, 1994, among 
          TNF Holdings Company, Inc.,* Whitney 1990 Equity Fund, L.P.  and 
          J.H. Whitney & Co., as amended by Amendment No.  1, dated as of 
          March 1, 1995, and Amendment No.  2, dated as of March 27, 1996.

10.2B(1)  Form of Amendment No.  3, dated as of , 1996, to Preferred Stock 
          Purchase Agreement (included in Exhibit 10.2).

10.3(1)** Management Stock Purchase and Non-Competition Agreement, dated as 
          of June 6, 1994, among TNF Holdings Company, Inc.,* Marsden S.  
          Cason and William A.  McFarlane, as amended by Amendment No.  1, 
          dated as of June 22, 1995.

10.4(1)   Investor Stock Purchase Agreement, dated as of June 7, 1994, among 
          TNF Holdings Company, Inc.,* Richard T.  Peery, Jack L.  
          Richardson, Philip S. Schlein and Kenneth F.  Siebel.

10.5(1)   Stock Purchase Agreement, dated as of December 28, 1993, between 
          TNF Holdings Company, Inc., a California corporation, and Kabushiki 
          Kaisha Goldwin, as amended by Memorandum, dated as of March 29, 
          1994, among TNF Holdings Company, Inc., a California corporation, 
          and Kabushiki Kaisha Goldwin, and Memorandum No.  2, dated as of 
          May 20, 1994, between TNF Holdings Company, Inc., a California 
          corporation, and Kabushiki Kaisha Goldwin.

10.6(1)   Securityholders Agreement, dated as of June 7, 1994, among TNF 
          Holdings Company, Inc.,* Marsden S.  Cason, William A.  McFarlane, 
          J.H.  Whitney & Co., Whitney 1990 Equity Fund, L.P., Whitney 
          Subordinated Debt Fund, L.P., Richard T.  Peery, Jack L.  
          Richardson, Philip S.  Schlein and Kenneth F. Siebel, as amended by 
          Amendment No. 1, dated as of June 22, 1995.

10.7(1)   Registration Rights Agreement, dated as of June 7, 1994, among TNF 
          Holdings Company, Inc.,* J.H.  Whitney & Co., Whitney 1990 Equity 
          Fund, L.P., Whitney Subordinated Debt Fund, L.P., Marsden S.  Cason 
          and William A. McFarlane, as amended by Amendment No.  1, dated as 
          of June 22, 1995, and Amendment No.  2, dated as of May 20, 1996.

10.8(1)   Amended and Restated Loan and Security Agreement, dated as of March 
          1, 1995, between The North Face, Inc.  and Heller Financial, Inc., 
          as Agent and as a Lender, as amended by First Amendment, dated as 
          of May 4, 1995, Second Amendment, dated as of August , 1995, Third 
          Amendment, dated as of March 27, 1996, and Fourth Amendment, dated 
          May 8, 1996.

10.8A(1)  Form of Second Amended and Restated Loan and Security Agreement, 
          dated as of June , 1996, between The North Face, Inc.  and Heller 
          Financial, Inc., as Agent and as a Lender.

10.9(2)** TNF Holdings Company, Inc.* 1994 Stock Incentive Plan, as amended.

                                       17
<PAGE>

10.10**    The North Face, Inc. 1995 Stock Incentive Plan, as amended

10.11(1)** The North Face, Inc. 1996 Stock Incentive Plan.

10.12(1)** The North Face, Inc. 1996 Employee Stock Purchase Plan.

10.13(1)** The North Face, Inc. 1996 Directors' Stock Option Plan.

10.14(1)** Letter Employment Agreement, dated June 8, 1994, between Roxanna 
           Prahser and TNF Holdings Company, Inc.*

10.15(1)** Letter Employment Agreement, dated May 3, 1995, between Roger Kase 
           and The North Face, Inc.

10.16**    Letter Employment Agreement dated March 15, 1996, between Carlo 
           Armenise and The North Face, Inc.

10.17(1)** Confidential Change in Status and General Release Agreement, 
           entered into on April 25, 1996, to be effective on and as of 
           December 19, 1995, by and between William A.  McFarlane and The 
           North Face, Inc.

10.18(1)   Trademark License, dated October 29, 1993, between the North Face 
           and W.L. Gore & Associates, Inc.

11.1       Computation of Pro Forma Net Income (Loss) Per Share.

13         1996 Annual Report to Stockholders

21.1(1)    List of Subsidiaries of The North Face, Inc.

23.1       Consent of Deloitte & Touche LLP.

24.1       Powers of Attorney.  Contained on page 19 of this report and 
           incorporated herein by reference.

27.1       Financial Data Schedule.


*   TNF Holdings Company, Inc., a Delaware corporation, changed its name to The
    North Face, Inc. on June 8, 1994.
**  Indicates management contract or compensatory plan or arrangement.
(1) Incorporated by reference to the Company's Registration Statement on Form
    S-1 (No.  333-04107) and amendments thereto, filed with the Securities
    and Exchange Commission on May 20, 1996, June 3, 1996, and June 24, 1996.
(2) Incorporated by reference to the Company's Registration Statement on Form
    S-1 (No. 333-14945) filed with the Securities and Exchange Commission on 
    October 28, 1996.

     (b) Reports on Form 8-K: none.

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

March 28, 1997                          The North Face, Inc.
                                   (Registrant)

     
                                   By ______________________
                                          William N. Simon
                                           Chief Executive Officer


                                       18
<PAGE>


KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Marsden S. Cason, William N. Simon and
Roxanna Prahser, and each of them, his or her true and lawful agent, proxy and
attorney-in-fact, with full power of substitution and resubstitution, for him or
her and in his or her name, place and stead, in any and all capacities, to (i)
act on, sign and file with the Securities and Exchange Commission any and all
amendments to this report on Form 10-K together with all schedules and exhibits
thereto, (ii) act on, sign and file such certificates, instruments, agreements
and other documents as may be necessary or appropriate in connection therewith,
and (iii) take any and all actions which may be necessary or appropriate to be
done, as fully for all intents and purposes as he or she might or could do in
person, hereby approving, ratifying and confirming all that such agent, proxy
and attorney-in-fact or any of his or her subsititutes may lawfully do or cause
to be done by virtue thereof.
                    
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

     Signatures               Title or Capacities                    Date
     ----------               -------------------                    ----


/s/ Marsden S. Cason
--------------------------- Chairman and Director                March 27 ,1997
    Marsden S. Cason

/s/ William N. Simon
--------------------------- Chief Executive Officer, President   March 26, 1997
     William N. Simon       and Director (Principal Executive
                            Officer)
/s/ Roxanna Prahser
---------------------------  Chief Financial Officer (Principal  March 26, 1997
     Roxanna Prahser        Financial and Accounting Officer)

/s/ Ray E. Newton, III
--------------------------- Director                             March 24, 1997
     Ray E. Newton, III

--------------------------- Director                             March   , 1997
     Peter M. Castleman

/s/ James Fifield
--------------------------- Director                             March 25, 1997
     James Fifield

/s/ Michael Doyle
--------------------------- Director                             March 24, 1997
     Michael Doyle

                                       19

<PAGE>
                                  EXHIBIT INDEX

Exhibit No.                             Description

3.1(2)     Amended and Restated Certificate of Incorporation of The North Face,
           Inc.

3.2(A)(1)  Amended and Restated By-laws of The North Face, Inc.

4.1(1)     Specimen Common Stock Certificate of The North Face, Inc.

10.1(1)    Subordinated Note and Common Stock Purchase Agreement, dated as of 
           June 7, 1994, between TNF Holdings Company, Inc.,* and Whitney 
           Subordinated Debt Fund, L.P., as amended by Amendment No.  1, 
           dated as of March 1, 1995, and Amendment No.  2, dated as of March 
           27, 1996.

10.1A(1)   Subordinated Promissory Note due June 7, 2001 (issued pursuant to 
           the Subordinated Note and Common Stock Purchase Agreement, dated 
           as of June 7, 1994, as amended, included in 10.1).

10.1B(1)   Form of Amendment No.  3, dated as of , 1996, to Subordinated Note 
           and Common Stock Purchase Agreement (included in Exhibit 10.1).

10.1C(1)   Form of Amended and Restated Promissory Note due June 7, 2001 
           (included in Exhibit 10.1A).

10.2(1)    Preferred Stock Purchase Agreement, dated as of June 7, 1994, 
           among TNF Holdings Company, Inc.,* Whitney 1990 Equity Fund, L.P.  
           and J.H. Whitney & Co., as amended by Amendment No.  1, dated as 
           of March 1, 1995, and Amendment No.  2, dated as of March 27, 1996.

10.2B(1)   Form of Amendment No.  3, dated as of , 1996, to Preferred Stock 
           Purchase Agreement (included in Exhibit 10.2).

10.3(1)**  Management Stock Purchase and Non-Competition Agreement, dated as 
           of June 6, 1994, among TNF Holdings Company, Inc.,* Marsden S.  
           Cason and William A.  McFarlane, as amended by Amendment No.  1, 
           dated as of June 22, 1995.

10.4(1)    Investor Stock Purchase Agreement, dated as of June 7, 1994, among 
           TNF Holdings Company, Inc.,* Richard T.  Peery, Jack L.  
           Richardson, Philip S. Schlein and Kenneth F.  Siebel.

10.5(1)    Stock Purchase Agreement, dated as of December 28, 1993, between 
           TNF Holdings Company, Inc., a California corporation, and 
           Kabushiki Kaisha Goldwin, as amended by Memorandum, dated as of 
           March 29, 1994, among TNF Holdings Company, Inc., a California 
           corporation, and Kabushiki Kaisha Goldwin, and Memorandum No.  2, 
           dated as of May 20, 1994, between TNF Holdings Company, Inc., a 
           California corporation, and Kabushiki Kaisha Goldwin.

10.6(1)    Securityholders Agreement, dated as of June 7, 1994, among TNF 
           Holdings Company, Inc.,* Marsden S.  Cason, William A.  McFarlane, 
           J.H.  Whitney & Co., Whitney 1990 Equity Fund, L.P., Whitney 
           Subordinated Debt Fund, L.P., Richard T.  Peery, Jack L.  
           Richardson, Philip S.  Schlein and Kenneth F. Siebel, as amended 
           by Amendment No. 1, dated as of June 22, 1995.

10.7(1)    Registration Rights Agreement, dated as of June 7, 1994, among TNF 
           Holdings Company, Inc.,* J.H.  Whitney & Co., Whitney 1990 Equity 
           Fund, L.P., Whitney Subordinated Debt Fund, L.P., Marsden S.  
           Cason and William A. McFarlane, as amended by Amendment No.  1, 
           dated as of June 22, 1995, and Amendment No.  2, dated as of May 
           20, 1996.

<PAGE>

10.8(1)    Amended and Restated Loan and Security Agreement, dated as of 
           March 1, 1995, between The North Face, Inc.  and Heller Financial, 
           Inc., as Agent and as a Lender, as amended by First Amendment, 
           dated as of May 4, 1995, Second Amendment, dated as of August , 
           1995, Third Amendment, dated as of March 27, 1996, and Fourth 
           Amendment, dated May 8, 1996.

10.8A(1)   Form of Second Amended and Restated Loan and Security Agreement, 
           dated as of June , 1996, between The North Face, Inc.  and Heller 
           Financial, Inc., as Agent and as a Lender.

10.9(2)**  TNF Holdings Company, Inc.* 1994 Stock Incentive Plan, as amended.

10.10**    The North Face, Inc. 1995 Stock Incentive Plan, as amended

10.11(1)** The North Face, Inc. 1996 Stock Incentive Plan.

10.12(1)** The North Face, Inc. 1996 Employee Stock Purchase Plan.

10.13(1)** The North Face, Inc. 1996 Directors' Stock Option Plan.

10.14(1)** Letter Employment Agreement, dated June 8, 1994, between Roxanna 
           Prahser and TNF Holdings Company, Inc.*

10.15(1)** Letter Employment Agreement, dated May 3, 1995, between Roger Kase 
           and The North Face, Inc.

10.16**    Letter Employment Agreement dated March 15, 1996, between Carlo 
           Armenise and The North Face, Inc.

10.17(1)** Confidential Change in Status and General Release Agreement, 
           entered into on April 25, 1996, to be effective on and as of 
           December 19, 1995, by and between William A.  McFarlane and The 
           North Face, Inc.

10.18(1)   Trademark License, dated October 29, 1993, between the North Face 
           and W.L. Gore & Associates, Inc.

11.1       Computation of Pro Forma Net Income (Loss) Per Share.

13         1996 Annual Report to Stockholders

21.1(1)    List of Subsidiaries of The North Face, Inc.

23.1       Consent of Deloitte & Touche LLP.

24.1       Powers of Attorney.  Contained on page 19 of this report and 
           incorporated herein by reference.

27.1       Financial Data Schedule.

*   TNF Holdings Company, Inc., a Delaware corporation, changed its name to The
    North Face, Inc. on June 8, 1994.
**  Indicates management contract or compensatory plan or arrangement.
(1) Incorporated by reference to the Company's Registration Statement on Form
    S-1 (No.  333-04107) and amendments thereto, filed with the Securities
    and Exchange Commission on May 20, 1996, June 3, 1996, and June 24, 1996.
(2) Incorporated by reference to the Company's Registration Statement on Form
    S-1 (No. 333-14945) filed with the Securities and Exchange Commission on 
    October 28, 1996.