<PAGE>

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC  20549

                                   FORM 10-Q


   X   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
   -   EXCHANGE ACT OF 1934

 For the quarterly period ended March 31, 2000

     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE ACT OF
     1934
     For the transition period from ______________ to ______________


                        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                (I.R.S. Employer Identification No.)
of incorporation or organization)

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

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

Not applicable.
(Former name, former address and formal fiscal year, if changed since last
report)


Indicate by check mark whether 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
    ----


The number of shares of Common Stock, $0.0025 par value per share, outstanding
on May 11, 2000, was 12,757,229.

                                       1
<PAGE>

                              THE NORTH FACE, INC.

                                 MARCH 31, 2000


                               INDEX TO FORM 10-Q

<TABLE>
<CAPTION>


PART I.       FINANCIAL INFORMATION                                             PAGE NO.
<S>                                                                                <C>

     Item 1 -  Financial Statements (unaudited)

               Condensed Consolidated Balance Sheets as of March 31, 2000,
                 December 31, 1999 and March 31, 1999...........................    3

               Condensed Consolidated Statements of Operations for the Three
                 Months Ended March 31, 2000 and 1999...........................    4

               Condensed Consolidated Statements of Cash Flows for the Three
                 Months Ended March 31, 2000 and 1999...........................    5

               Notes to Condensed Consolidated Financial Statements.............    6


     Item 2 -  Management's Discussion and Analysis of Financial Condition and
                 Results of Operations..........................................   10

PART II.    OTHER INFORMATION

     Item 1 -  Legal Proceedings.................................................   13

     Item 6 -  Exhibits and Reports on Form 8-K..................................   13
</TABLE>

                                       2
<PAGE>

ITEM 1.  FINANCIAL STATEMENTS

                              THE NORTH FACE, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                    (In thousands, except per share amounts)
                                  (unaudited)


<TABLE>
<CAPTION>
                             Assets                                March 31, 2000    December 31, 2000    March 31, 1999
                             ------                                --------------    -----------------    --------------
Current assets:
<S>                                                                <C>               <C>                  <C>
Cash and cash equivalents.......................................         $  4,315             $ 11,824          $  5,955
Accounts receivable, net........................................           45,205               43,687            62,555
Inventories.....................................................           70,393               82,365            59,621
Deferred taxes..................................................              238                  247             3,648
Other current assets............................................            6,043                6,696            15,256
                                                                          -------              -------           -------
 Total current assets...........................................          126,194              144,819           147,035
Property and equipment, net.....................................           29,557               32,859            31,947
Trademarks and intangibles, net.................................            5,663                7,454            33,745
Other assets....................................................            1,038                2,407             5,404
                                                                          -------              -------           -------
 Total assets...................................................         $162,452             $187,539          $218,131
                                                                          =======              =======           =======
                     Liabilities and Stockholders' Equity
                     ------------------------------------

Current liabilities:
Accounts payable, accrued expenses and other                             $ 42,339             $ 66,565          $ 34,268
 current liabilities............................................
Short-term borrowings and current portion of long-term debt               107,158               88,294            50,884
 and capital lease obligations..................................          -------              -------           -------
 Total current liabilities......................................          149,497              154,859            85,152
Long-term debt and obligations under capital leases.............              991                1,174             5,426
Other long-term liabilities.....................................            5,358                5,375             7,003
                                                                          -------              -------           -------
 Total liabilities..............................................          155,846              161,408            97,581

Minority interest...............................................              817                  642               701

Commitments and contingencies (Note 5)..........................              ---                  ---               ---

Stockholders' equity:
Common stock, $.0025 par value - shares authorized   50,000,000;               32                   32                32
 Issued and outstanding; 12,753,000 at March 31, 2000;
 12,744,000 at December 31, 1999; and 12,721,000 at
 March 31, 1999.................................................
Additional paid-in capital......................................          103,949              103,920           103,724
Retained earnings...............................................          (98,210)             (78,821)           16,169
Accumulated other comprehensive income -                                       18                  358               (76)
                                                                          -------              -------           -------
 cumulative  translation adjustments............................
 Total stockholders' equity.....................................            5,789               25,489           119,849
                                                                          -------              -------           -------
 Total liabilities and stockholders' equity.....................         $162,452             $187,539          $218,131
                                                                          =======              =======           =======
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>

                              THE NORTH FACE, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In thousands, except per share amounts)
                                  (unaudited)



<TABLE>
<CAPTION>
                                                                              Three Months Ended
                                                                                  March 31,
                                                                            2000            1999

<S>                                                                      <C>                <C>
Net sales.................................................               $  57,144         $ 51,256
Cost of sales.............................................                  38,114           27,909
                                                                         ---------         --------
Gross profit..............................................                  19,030           23,347
Operating expenses........................................                  33,857           29,300
                                                                         ---------         --------
Operating loss............................................                 (14,827)          (5,953)
Interest expense, net.....................................                  (3,365)          (1,321)
Other expense, net........................................                  (1,134)          (1,727)
                                                                         ---------         --------
Loss before income taxes..................................                 (19,326)          (9,001)
Income tax provision (benefit)............................                      63           (3,510)
                                                                         ---------         --------
Net loss..................................................                ($19,389)          ($5,491)
                                                                         =========         =========
Net loss per share:
  Basic...................................................                  ($1.52)          ($0.43)
  Diluted.................................................                  ($1.52)          ($0.43)
Weighted average shares outstanding:
  Basic...................................................                  12,752           12,687
  Diluted.................................................                  12,752           12,687
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>

                              THE NORTH FACE, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                  (unaudited)


<TABLE>
<CAPTION>
                                                                                                     Three Months Ended
                                                                                                           March 31,
                                                                                                           --------
                                                                                                     2000               1999
                                                                                                     ----               ----
<S>                                                                                                <C>                 <C>
Cash Flows From Operating Activities:
Net loss..............................................................................             $(19,389)           $(5,491)
Adjustments to reconcile net loss to cash provided by operating activities:
  Depreciation and amortization.......................................................                4,090              3,393
  Loss from disposal of property and equipment........................................                  241                ---
  Deferred income taxes...............................................................                    9                 13
  Provision for doubtful accounts.....................................................                3,406               (282)
  Tax benefit of exercise of stock options............................................                  ---                131
Effect of changes in:
  Accounts receivable.................................................................               (5,658)            16,918
  Inventories.........................................................................               11,972             (2,184)
  Income tax receivable...............................................................                  539             (3,332)
  Other assets........................................................................                  988              1,506
  Accounts payable, accrued expenses and other current liabilities....................              (24,243)            (6,172)
                                                                                                     ------              -----
Net cash provided by operating activities.............................................              (28,045)             4,500
                                                                                                     ------              -----
Cash Flows From Investing Activities:
Proceeds from sale of La Sportiva S.p.A...............................................                2,141                ---
Proceeds from sale of land............................................................                  667                ---
Purchases of property and equipment...................................................                 (642)            (5,523)
                                                                                                     ------              -----
Net cash used by investing activities.................................................                2,166             (5,523)
                                                                                                     ------              -----
Cash Flows From Financing Activities:
Repayments of long-term debt..........................................................               (1,284)              (342)
Repayment of (proceeds from) revolver, net............................................               19,965             (5,631)
Proceeds from issuance of stock.......................................................                   29                 45
                                                                                                     ------              -----
Net cash used in financing activities.................................................               18,710             (5,928)
                                                                                                    -------              -----
Effect of foreign currency fluctuations on cash.......................................                 (340)              (546)
                                                                                                    -------              -----
Increase (decrease) in cash and cash equivalents......................................               (7,509)            (7,497)
                                                                                                    -------              -----
Cash and cash equivalents, beginning of period........................................               11,824             13,452
                                                                                                    -------            -------
Cash and cash equivalents, end of period..............................................             $  4,315            $ 5,955
                                                                                                   ========            =======

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for:
  Interest.............................................................................              $2,531             $1,415
  Income taxes.........................................................................              $  249             $  389
Noncash financing activities:
  Issuance of common stock for land....................................................              $  ---             $2,500
  Acquisition of property and equipment through capital leases.............................          $  ---             $1,013
</TABLE>
     See accompanying notes to condensed consolidated financial statements.

                                       5
<PAGE>

                              THE NORTH FACE, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)


NOTE 1.  BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements of
The North Face, Inc. and its subsidiaries (the "Company") have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. Accordingly, the interim unaudited financial statements should be
read in conjunction with the financial statements included in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1999 (the Form
"10-K").  Operating results for the three months ended March 31, 2000 are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 2000.

     These financial statements have been prepared by the Company in a manner
consistent with that used in the preparation of the consolidated financial
statements included in the Form 10-K.  In the opinion of management, the
accompanying financial statements reflect all adjustments, consisting only of
normal and recurring adjustments, necessary for a fair presentation of the
financial position and results of operations and cash flows for the periods
presented.  All significant intercompany accounts and transactions have been
eliminated. The Condensed Consolidated Balance Sheet as of December 31, 1999 has
been derived from the Consolidated Balance Sheet as of December 31, 1999
included in the Form 10-K.

     The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business.  As shown in the Form 10-K, the
Company incurred net losses of $100.5 million in 1999, and, as of that date, the
Company's current liabilities exceeded its current assets by $10.0 million.
Additionally, the Company incurred a loss of $19.4 million in the three months
ended March 31, 2000 and its current liabilities exceeded its current assets by
$23.3 million at March 31, 2000.  These factors, among others, raise substantial
doubt about the Company's ability to continue as a going concern.

     The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.  As described in Note 3, the Company's
bank credit facility expires on June 15, 2000; therefore, the outstanding loan
($104.7 million) has been classified as a current liability.  As discussed in
Note 2, in April 2000, the Company executed a definitive merger agreement (the
"VF Merger Agreement") providing for the acquisition of all the outstanding
shares of the Company by VF Corporation ("VF") for $2.00 per share.

     The Company's difficulties in meeting its loan agreement covenants and
financing needs, its losses from operations, its negative working capital
position, and the scheduled expiration of its credit facility on June 15, 2000
have raised substantial doubt about its ability to continue as a going concern.
As a consequence, if, for any reason, the tender offer and merger contemplated
by the VF Merger Agreement are not consummated, the Company will be required to
consider seeking protection under Chapter 11 of the Bankruptcy Code.

                                       6
<PAGE>

NOTE 2.  MERGER AGREEMENT

  In April 2000, the Company executed the VF Merger Agreement providing for the
acquisition of all the outstanding shares of the Company by VF for $2.00 per
share.  As a first step in the transaction, a subsidiary of VF has commenced a
cash tender offer, scheduled to expire on May 16, 2000, for all the outstanding
shares of the Company at $2.00 per share.  The offer is conditioned, among other
things, upon a majority of the issued and outstanding shares being tendered and
not withdrawn prior to the expiration of the offer.  Following successful
completion of the tender offer, the VF subsidiary will be merged into the
Company and each outstanding share will be converted into the right to receive
$2.00 in cash.

NOTE 3.  CREDIT FACILITY

  The Company has a Global Senior Secured Revolving Credit Facility with the
Industrial Bank of Japan, Limited, New York Branch (as syndication agent and
documentation agent), IBJ Whitehall Business Credit Corporation (as arrangers,
collateral agent and as administrative agent for itself and other lenders), and
other financial institutions.  The credit facility includes a term note, a
revolving line of credit, and a letter of credit facility.  The revolving line
of credit provides for borrowings up to $100.0 million with the actual
borrowings limited based on the amount of eligible receivables and inventory.
The credit facility includes certain financial covenants and restrictions on new
indebtedness and the payment of cash dividends.

  In February 2000, the Company's bank credit facility was amended to increase
the borrowing limit to the available collateral plus $16.0 million and to
reflect certain changes in the financial and reporting covenants, among other
things.  The Company was charged an amendment fee of $1.0 million, which was
paid upon the signing of the amendment, and a deferred fee of $3.5 million,
which was payable on the earlier of (1) the sale of at least 51% of the
outstanding shares or assets of the Company or (2) June 15, 2000.  In April
2000, the Company and the lender signed a waiver and agreement reducing the
deferred fee from $3.5 million to $876,000 in the case of the merger under the
VF Merger Agreement.

  In April 2000, the Company's credit facility was amended to extend the
expiration date from April 15, 2000 to the earlier of (1) June 15, 2000 or (2)
the time the merger under the VF Merger Agreement becomes effective.

NOTE 4.  FACILITY CLOSURE

     In February 2000, the Company closed its Carbondale, Colorado
administrative facility and relocated those employees to its headquarter
facility in San Leandro, California.  The Company incurred approximately
$845,000 in operating expenses related to the closure and relocation during the
three months ended March 31, 2000.

NOTE 5.  COMMITMENTS AND CONTINGENCIES

  On February 27, 1999, the Company entered into a Transaction Agreement (the
"Transaction Agreement") with TNF Acquisition LLC ("TNF"), an affiliate of
Leonard Green & Partners, L.P. ("LGP").  The Transaction Agreement provided for
a tender offer for all of the Company's outstanding stock (other than shares
held by James G. Fifield, former President and Chief Executive Officer) at
$17.00 cash per share and the acquisition of control of the Company by LGP and
Mr. Fifield.  On March 5, 1999, the Company withdrew its tender offer.  The
Transaction Agreement remained in full force and effect, although LGP had
informed the Company that it was reevaluating the transactions contemplated by
the Transaction Agreement (the "Transactions").  On September 1, 1999, the
Transaction Agreement was terminated and the Company

                                       7
<PAGE>

agreed to pay LGP $2.2 million to reimburse LGP for expenses associated with the
terminated Transaction Agreement.

     In March 1999, various complaints were filed against the Company and its
Board of Directors in the Delaware Court of Chancery and in the California
Superior Court, Alameda County in connection with the Transactions.  The
complaints, filed on behalf of a purported class of the Company's shareholders,
generally alleged that the Transactions were unfair and inadequate to the
Company's shareholders and charge the defendants with self-dealing and breach of
fiduciary duties.  The complaints generally requested injunctive relief to
prevent the consummation of the Transactions and sought other remedies in the
event the Transactions were completed. The Company has filed a motion to dismiss
these claims.

     Beginning in March 1999, purported shareholder class action lawsuits were
filed in federal district court against the Company and certain of its former
and current officers and directors alleging violations of the federal securities
laws.  These complaints (collectively, the "Securities Litigation") have been
consolidated in federal district court in Colorado.  The consolidated action
generally alleges that the Company made false and misleading statements about
its financial results from January 22, 1998 through April 16, 1999.  The Company
has filed a motion to dismiss these claims.

     On April 6, 1999, a shareholder derivative action purportedly on behalf of
the Company, captioned Eng v. Cason, et al., Civil Action No. 810726-0, was
filed in California Superior Court, Alameda County.  The complaint alleges that
the Company's directors and various current and former officers violated
California law and breached fiduciary duties to the Company by engaging in
alleged wrongful conduct from April 25, 1997 through March 12, 1999, including
the conduct complained of in the Securities Litigation.  The Company is named
solely as a nominal defendant, against whom the plaintiff sought no recovery.
The Alameda Superior Court granted the Company's motion to dismiss the
derivative complaint with leave to amend.

     In December 1999, a case, FDX Supply Chain Services, Inc. v. The North
Face, Inc., No. 99-2569, was filed in federal district court in the district of
Kansas.  The dispute arises out of a contract in which FDX agreed to provide
warehouse services to the Company, fill orders and ship the Company's products
to customers nationwide from the Company's warehouse facility in Lenexa, Kansas.
The Company terminated the contract in December 1999.  The lawsuit alleges
damages of $5.2 million for breach of contract.  The Company has filed
counterclaims seeking $25 million in damages, alleging that the damage
limitation provisions of the agreement should not apply because of FDX's
misrepresentations inducing the Company to enter into the agreement and FDX's
gross failure to perform.  FDX has moved to dismiss all the Company's
counterclaims because of, inter alia, the damage limitation provisions of the
agreement.

NOTE 6.  SALE OF LA SPORTIVA BUSINESSES

     On January 13, 2000 the Company sold its 20% interest in La Sportiva
S.p.A., a premier manufacturer and distributor of trekking, mountaineering, and
climbing footwear located in Ziano di Fiemme, Italy, to the majority
shareholders for 4.3 billion lira ($2.3 million).  In addition, the Company is
attempting to sell La Sportiva USA, Inc. (which owns the exclusive rights to
distribute footwear for La Sportiva S.p.A. in the Unites States).  The goodwill
for La Sportiva S.p.A. and La Sportiva USA, Inc. were written down in 1999 to
reduce the balance to the estimated market value.   Therefore, the sale of La
Sportiva S.p.A. had no effect on net income in the three months ended March 31,
2000.

                                       8
<PAGE>

NOTE 7.  OTHER COMPREHENSIVE LOSS

     The following is a summary of the calculation of other comprehensive loss
(in thousands):

<TABLE>
<CAPTION>
                                                                        Three Months Ended
                                                                             March 31,
                                                                        ---------------------
                                                                        2000             1999
                                                                        ----             ----
<S>                                                         <C>                 <C>
Net loss.................................................           $(19,389)         $(5,491)
Translation adjustments..................................               (340)            (546)
                                                                    --------          -------
Net comprehensive loss...................................           $(19,729)         $(6,037)
                                                                    ========          =======
</TABLE>

NOTE 8.  EARNINGS PER SHARE

     Basic earnings per share (EPS) is computed by dividing net income by the
weighted average number of common shares outstanding for the period.  Diluted
EPS is computed by dividing net income by the diluted weighted average number of
common shares outstanding during the period.  Diluted EPS reflects the potential
dilution that could occur upon exercise of dilutive instruments, such as stock
options.  Diluted EPS for the three months ended March 31, 2000 and 1999 exclude
any effect of all stock options because their inclusion would be antidilutive.
The following is a summary of the calculation of the number of shares used in
calculating basic and diluted EPS (in thousands):

<TABLE>
<CAPTION>
                                                                       Three Months Ended
                                                                            March 31,
                                                                      ----------------------
                                                                        2000            1999
                                                                        ----            ----
<S>                                                                   <C>             <C>
Shares used to compute basic EPS.........................             12,752          12,687
Add:  effect of dilutive securities......................                --              --
                                                                      ------          ------
Shares used to compute diluted EPS.......................             12,752          12,687
                                                                      ======          ======
</TABLE>

                                       9
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

Results of Operations

     The following table sets forth, for the periods indicated, certain items in
the Company's condensed consolidated statements of operations as a percentage of
net sales (except for income taxes, which are shown as a percentage of pretax
loss).  The results of operations for the three months ended March 31, 2000 and
1999 are not necessarily indicative of results for the full year.

<TABLE>
<CAPTION>
                                                                    Three Months Ended
                                                                         March 31
                                                                   -------------------
                                                                     2000         1999
                                                                     ----         ----
<S>                                                                 <C>           <C>
Net sales.............................................              100.0%        100.0%
Gross profit..........................................               33.3%         45.5%
Operating expenses....................................               59.2%         57.2%
Operating loss........................................              (25.9%)       (11.6%)
Interest expense, net.................................               (5.9%)        (2.6%)
Loss before income taxes..............................              (33.8%)       (17.6%)
Income tax provision (benefit)........................                0.3%        (39.0%)
Net loss..............................................              (33.9%)       (10.7%)
</TABLE>


Three Months Ended March 31, 2000 Compared to Three Months Ended March 31, 1999

Net Sales.  Net sales increased by 11.5% to $57.1 million from $51.3 million for
the three months ended March 31, 2000 over the three months ended March 31,
1999.

     Net sales to wholesale customers increased by 10.8% to $44.5 million from
$40.2 million for the three months ended March 31, 2000 over the three months
ended March 31, 1999.  The increase was primarily due to liquidation sales
during the three months ended March 31, 2000 to dispose of excess inventory.

     Retail sales increased by 14.0% to $12.6 million from $11.1 million for the
three months ended March 31, 2000 over the three months ended March 31, 1999.
The increase was primarily due to the opening of five outlet stores subsequent
to March 31, 1999.

Gross Profit.  Gross profit as a percentage of net sales for the three months
ended March 31, 2000 was 33.3% compared to 45.5% for the three months ended
March 31, 1999.  The decrease in gross margin was primarily due to discounts
given on liquidation sales to dispose of excess inventory.

Operating Expenses.  Operating expenses, which include selling, marketing and
general administrative expenses, increased by 15.6% to $33.9 million from $29.3
million for the three months ended March 31, 2000 over the three months ended
March 31, 1999.  The increase was primarily due to bank fees of $1.3 million
related to the extension of the Company's credit facility and $2.4 million
higher distribution costs, including start-up costs with the Company's new third
party distributor hired in January 2000.  In addition, the Company incurred $.7
million of advertising costs during the three months ended March 31, 2000
related to the airing of a television series during January 2000.

                                       10
<PAGE>

Interest Expense.  Interest expense for the three months ended March 31, 2000
increased to $3.4 million from $1.3 million for the three months ended March 31,
1999.  The increase was primarily due to higher borrowings under the Company's
credit facility as a result of capital investments made in 1999 and higher
operating costs, as well as a higher interest rate during the three months ended
March 31, 2000.

Other Expenses.  During the three months ended March 31, 2000, the Company
recorded other expenses of $1.1 million as compared to $1.7 million in the three
months ended March 31, 1999.  For the three months ended March 31, 2000, these
expenses were primarily related to foreign exchange losses in Europe.  For the
three months ended March 31, 1999, these expenses were primarily related to the
Company's tender offer Transaction Agreement with TNF Acquisition LLC (see Note
5 of the Notes to Condensed Consolidated Financial Statements).

Provision for Income Taxes. Provision for income taxes as a percent of pretax
income or loss was 0.3% for the three months ended March 31, 2000 compared to a
benefit of 39.0% for the three months ended March 31, 1999.  This change
reflects the uncertainty of future earnings and, therefore, the uncertainty of
utilizing the Company's net operating loss carryforwards.

LIQUIDITY AND CAPITAL RESOURCES

          The Company has a revolving credit facility that provides for
borrowings up to $100.0 million, with the actual borrowings limited based on the
amount of eligible receivables and inventory.  In addition, the credit facility
includes a $15.0 million term note facility, which calls for $0.75 million to be
repaid quarterly beginning on October 1, 1999.  The credit facility also
includes certain financial covenants and restrictions on new indebtedness and
the payment of cash dividends.  In April 2000, the Company's credit facility was
amended to extend the expiration date from April 15, 2000 to the earlier of (1)
June 15, 2000 or (2) the time the merger under the VF Merger Agreement becomes
effective.

          The Company experienced significant liquidity problems in the second
half of 1999 and in 2000 as a result of shipping difficulties encountered when
it outsourced its U.S. distribution of products to a third party distributor in
July 1999.  Late shipments significantly reduced the Company's sales,
profitability and borrowing base.

          In February 2000, the Company's bank credit facility was amended to
increase the borrowing limit to the available collateral plus $16.0 million and
to reflect certain changes in the financial and reporting covenants, among other
things.  The Company was charged an amendment fee of $1.0 million, which was
paid upon the signing of the amendment, and a deferred fee of $3.5 million,
which was payable on the earlier of (1) the sale of at least 51% of the
outstanding shares or assets of the Company or (2) June 15, 2000.  In April
2000, the Company and the lender signed a waiver and agreement reducing the
deferred fee from $3.5 million to $876,000 in the case of the merger under the
VF Merger Agreement.

          The Company estimates that its capital expenditures in 2000 will be
approximately $4.0 million. This amount will be used principally for the upgrade
of management information systems and updates of current Summit Shops.  As of
March 31, 2000, capital expenditures totaled approximately $0.6 million.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

          The Company is exposed to market risks, which include foreign currency
risks, interest rate risks and inflation risk.  The Company does not engage in
financial transactions for trading or speculative purposes.

                                       11
<PAGE>

          Foreign Currency Exchange Rate Risk.  The Company's inventory
purchases from contract manufacturers in the Far East are denominated in United
States dollars; however, purchase prices for the Company's products may be
impacted by fluctuations in the exchange rate between the Unites States dollar
and the local currencies of the contract manufacturers, which may have the
effect of increasing the Company's cost of goods sold in the future.  In
addition, the Company's sales in Europe and Canada are denominated in the local
currencies of the applicable specialty retailer, which may have a negative
impact on profit margins or the rate of growth of sales in those countries if
the U.S. dollar were to strengthen significantly.  Due to the number of foreign
currencies involved and the fact that not all of these foreign currencies
fluctuate in the same manner against the United States dollar, the Company
cannot quantify in any meaningful way the potential effect of such fluctuations
on future income.

          The Company may be affected by the current devaluation of the Asian
currencies due to the Company's importing of raw materials to Asia.
Furthermore, the Company may be affected by economic and political conditions in
each of the countries in which it operates.  Risks associated with operating in
the international arena include: (i) economic instability, including the
possible revaluation of currencies; (ii) extreme currency exchange fluctuations
where the Company has not entered into foreign currency forward and option
contracts to manage exposure to certain foreign currency commitments; (iii)
changes to import or export regulations (including quotas); (iv) labor or civil
unrest; and (v) in certain parts of the world, political instability.  The
Company has not as yet been materially affected by any such risks, but cannot
predict the likelihood of such developments occurring or the impact of any such
risks to the future profitability of the Company.

          Interest Rate Risk.  The interest payable on the Company's bank line
of credit is based on variable interest rates and, therefore, is affected by
changes in market interest rates.

          Inflation Risk.  The Company believes that the relatively moderate
rates of inflation over the last three years in the United States, where it
primarily competes, have not had a significant effect on its net sales or
results of operations.  Higher rates of inflation have been experienced in a
number of foreign countries in which the Company's products are manufactured,
but this has not had a material effect on the Company's net sales or results of
operations.  In the past, the Company has been able to offset its cost increases
by negotiation, increasing selling prices or changing suppliers.

                                       12
<PAGE>

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

For information on ceertain legal proceedings, see Item 3 of the Form 10-K.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

     27.1 Financial Data Schedule

(b)  Reports on Form 8-K

No reports on Form 8-K were filed by the Company during the three months ended
March 31, 2000.

                                       13
<PAGE>

                                   SIGNATURES

Pursuant to the requirements 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.

                                         THE NORTH FACE, INC.
                                             (Registrant)


     Dated:  May 12, 2000           By:  /s/ Geoffrey D. Lurie
                                         ---------------------------------
                                         Geoffrey D. Lurie
                                         Chief Executive Officer


     Dated:  May 12, 2000           By:  /s/ Michael A. Leinwand
                                         -------------------------
                                         Michael A. Leinwand
                                         Acting Chief Financial Officer
                                         (Principal Financial and Accounting
                                         Officer of the Registrant)

                                       14
<PAGE>

INDEX OF EXHIBITS


The following exhibits are included herein:


27.1   Financial Data Schedule

                                       15