<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 June 30, 1997

    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)

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

Former name, former address and former fiscal year,
if changed since last report.                              N/A


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 
    -----     ----

The number of shares of Common Stock, with $0.0025 par value, outstanding on
August 14, 1997, was 11,227,232.


                                          1
<PAGE>

                                 THE NORTH FACE, INC.

                                    JUNE 30, 1997

                                  INDEX TO FORM 10-Q




PART I.       FINANCIAL INFORMATION                                    PAGE NO.


    ITEM 1 - Financial Statements (unaudited)

              Condensed Consolidated Balance Sheets.....................  3

              Condensed Consolidated Statements of Operations ..........  4

              Condensed Consolidated Statements of Cash Flows ..........  5

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


    ITEM 2 - Management's Discussion and Analysis of Financial Condition
             and Results of Operations .................................. 7


PART II .          OTHER INFORMATION

    ITEM 1 - Legal Proceedings .........................................  12

    ITEM 4 - Submission of Matters to a Vote of Security Holders........  12

    ITEM 6 - Exhibits and Reports on Form 8-K...........................  12


                                          2
<PAGE>

                           PART I.    FINANCIAL INFORMATION

ITEM  1.      FINANCIAL STATEMENTS

                                 THE NORTH FACE, INC.

                        CONDENSED CONSOLIDATED BALANCE SHEETS
                  (In thousands, except share and per share amounts)
                                     (unaudited)


 
<TABLE>
<CAPTION>

                                                                                      June 30,   December 31,       June 30,
                                                                                        1997        1996              1996
                                                                                     ---------   ------------      ---------
<S>                                                                                  <C>         <C>               <C>
Current Assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . .          $1,695         $8,315           $795
Trade accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . .          23,253         21,405         12,232
Income tax receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . .           3,491          1,294          2,960
Other receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           4,405          2,744          3,052
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          47,326         31,475         29,987
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           4,799          4,075          5,210
                                                                                       -------        -------        -------
    Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . .          84,969         69,308         54,236

Property and equipment, net. . . . . . . . . . . . . . . . . . . . . . . . . .          16,725         12,039          8,381
Trademarks and intangibles, net. . . . . . . . . . . . . . . . . . . . . . . .          29,460         29,346         29,722
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           2,452          1,255          1,899
                                                                                       -------        -------        -------
    Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        $133,606       $111,948        $94,238
                                                                                       -------        -------        -------
                                                                                       -------        -------        -------

                         LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable, accrued expenses, and other current liabilities. . . . . . .          19,327         18,775         17,158
Short term borrowings and current portion of long-term debt and
  obligations under capital leases . . . . . . . . . . . . . . . . . . . . . .          19,520             95         23,587
                                                                                       -------        -------        -------
    Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . .          38,847         18,870         40,745

Long-term debt and obligations under capital leases. . . . . . . . . . . . . .             942            135          5,008
Other long-term liabilities. . . . . . . . . . . . . . . . . . . . . . . . . .           6,576          6,444          6,554
Subordinated debt  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               0              0         24,333
                                                                                       -------        -------        -------
    Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . .          46,365         25,449         76,640
                                                                                       -------        -------        -------


Stockholders' equity:
Series A Preferred Stock, $1.00 par value - shares authorized 4,000,000;
  issued and outstanding 1,936,000 at June 30, 1996 and 0 at December
  31, 1996, and at June 30, 1997 . . . . . . . . . . . . . . . . . . . . . . .               0              0         12,267
Cumulative Preferred Dividends Accrued . . . . . . . . . . . . . . . . . . . .               0              0          2,774
Common Stock, $.0025 par value - 50,000,000 shares authorized;
  6,982,000 issued and outstanding at June 30, 1996; 11,200,000 at
  December 31, 1996; and 11,220,000 at June 30, 1997 . . . . . . . . . . . . .              29             29              7
Additional paid in capital . . . . . . . . . . . . . . . . . . . . . . . . . .          78,609         76,130            645
Subscriptions receivable . . . . . . . . . . . . . . . . . . . . . . . . . . .             (15)           (95)          (142)
Retained earnings  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           8,341         10,113          2,316
Cumulative translation adjustments . . . . . . . . . . . . . . . . . . . . . .             277            322           (269)
                                                                                       -------        -------        -------
     Total stockholders' equity. . . . . . . . . . . . . . . . . . . . . . . .          87,241         86,499         17,598
                                                                                       -------        -------        -------
     Total liabilities and stockholders' equity  . . . . . . . . . . . . . . .        $133,606       $111,948        $94,238
                                                                                       -------        -------        -------
                                                                                       -------        -------        -------

</TABLE>

See accompanying notes to 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            Six Months Ended
                                                                          June 30,                       June 30,
                                                                      1997           1996           1997           1996
                                                                   -------        -------        -------        -------
<S>                                                                <C>            <C>            <C>            <C>

Net Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . .   $31,087        $22,471        $70,429        $53,491
Cost of Sales. . . . . . . . . . . . . . . . . . . . . . . . . .    18,046         13,267         40,173         31,684
                                                                   -------        -------        -------        -------

Gross Profit . . . . . . . . . . . . . . . . . . . . . . . . . .    13,041          9,204         30,256         21,807
Operating Expenses . . . . . . . . . . . . . . . . . . . . . . .    15,975         11,716         32,748         24,180
                                                                   -------        -------        -------        -------

Operating Income (Loss). . . . . . . . . . . . . . . . . . . . .    (2,934)        (2,512)        (2,492)        (2,373)

Interest Expense . . . . . . . . . . . . . . . . . . . . . . . .      (301)        (1,473)          (420)        (2,926)
Other Income (Expense), net. . . . . . . . . . . . . . . . . . .       (87)           106            (25)           273
                                                                   -------        -------        -------        -------

Income (loss) Before Provision for Income Taxes. . . . . . . . .    (3,322)        (3,879)        (2,937)        (5,026)

Provision for Income Taxes . . . . . . . . . . . . . . . . . . .    (1,315)        (1,469)        (1,165)        (1,987)
                                                                   -------        -------        -------        -------

Net Income (Loss). . . . . . . . . . . . . . . . . . . . . . . .   ($2,007)       ($2,410)       ($1,772)       ($3,039)
                                                                   -------        -------        -------        -------
                                                                   -------        -------        -------        -------

Earnings per Share (1996, pro forma) . . . . . . . . . . . . . .    ($0.17)        ($0.33)        ($0.15)        ($0.41)
                                                                   -------        -------        -------        -------
                                                                   -------        -------        -------        -------


Weighted Average Shares Outstanding. . . . . . . . . . . . . . .    11,567          7,360         11,567          7,360

</TABLE>
 
             See accompanying notes to consolidated financial statements.


                                          4
<PAGE>

                                 THE NORTH FACE, INC.

                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (In thousands)
                                     (unaudited)


                                                          Six Months Ended
                                                        June 30,     June 30,
                                                          1997         1996
                                                        --------     --------

CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME (LOSS)                                        ($1,772)     ($3,039)
Adjustments to reconcile net income (loss) to
    cash provided by (used in) operating activities:
  Depreciation and amortization                            1,886        1,757
  Deferred income taxes                                        2           (2)
  Provision for doubtful accounts                             51           97
  Tax benefit of exercise of stock options                 2,339            0
Effect of changes in:
   Accounts receivable                                    (1,899)      (1,759)
   Inventories                                           (15,851)      (8,939)
   Other assets                                           (6,270)      (1,879)
   Accounts payable and accrued liabilities                  684        1,109
                                                        --------     --------

NET CASH USED IN OPERATING ACTIVITIES                    (20,830)     (12,655)
                                                        --------     --------

INVESTING ACTIVITIES-
   Purchase of fixed assets                               (6,109)        (985)
                                                        --------     --------

FINANCING ACTIVITIES:
  Borrowings on long term debt                             1,793        2,325
  Long term debt repayments                                 (134)        (312)
  Proceeds from revolver, net                             18,573        9,689
  Payments of debt acquisition costs                         (88)        (150)
  Proceeds from issuance of stock                            220            0
                                                        --------     --------
NET CASH PROVIDED BY FINANCING ACTIVITIES                 20,364       11,552
                                                        --------     --------

  Effect of foreign currency fluctuations on cash            (45)          60
                                                        --------     --------

DECREASE IN CASH AND CASH EQUIVALENTS                     (6,620)      (2,028)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD             8,315        2,823
                                                        --------     --------

CASH AND CASH EQUIVALENTS, END OF PERIOD                  $1,695         $795
                                                        --------     --------
                                                        --------     --------


             See accompanying notes to 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 financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations.

    These financial statements have been prepared by The North Face, Inc. in a
manner consistent with that used in the preparation of the consolidated
financial statements included in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996 (the "Form 10-K").  Certain items
contained in these statements are based on estimates.  In the opinion of
management, the accompanying financial statements reflect all adjustments,
consisting of only 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. Certain reclassifications have been made to
prior year amounts to conform with current year presentation.

    Operating results for the six month period ended June 30, 1997 are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 1997.  These unaudited financial statements should be read
in conjunction with the financial statements included in the Form 10-K.

    The financial statements included herein are unaudited.  The Condensed
Consolidated Balance Sheet as of December 31, 1996, has been prepared from the
Consolidated Balance Sheet as of December 31, 1996 included in the Form 10-K.

    Pro Forma Information -- Upon consummation of the Company's initial public
offering in July 1996, all outstanding shares of Series A Preferred Stock were
converted into 4,220,808 shares of Common Stock.  The net income per share and
shares used in per share calculations for the three and six month periods ended
June 30, 1996 reflect this conversion as of the beginning of the period.  In
accordance with the rules of the Securities and Exchange Commission, all common
stock equivalents issued within one year of the Company's anticipated initial
public offering have been considered outstanding for all periods using the
treasury stock method.  Due to the conversion of the Series A Preferred Stock
into Common Stock, historical earnings per share for 1996 is not meaningful.


NOTE 2.   RECENTLY ISSUED ACCOUNTING STANDARDS

     In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS
128").  The Company is required to adopt SFAS 128 in the fourth quarter of 1997
and will restate at that time earnings per share (EPS) data for prior periods to
conform with SFAS 128.  Earlier application is not permitted.  SFAS 128 replaces
current EPS reporting requirements and requires a dual presentation of basic and
diluted EPS.  Basic EPS excludes dilution and is computed by dividing net income
by the weighted average of common shares outstanding for


                                          6
<PAGE>

the period.  Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock.  If SFAS 128 had been in effect during the current and prior
year periods, basic EPS would have been ($.18) and ($.35) for the quarters ended
June 30, 1997 and 1996 (pro forma), respectively, and ($.16) and ($.44) for the
six months ended June 30, 1997 and 1996 (pro forma), respectively.  Diluted EPS
under SFAS 128 would not have been significantly different than EPS currently
reported for the periods. 

    In June 1997, the Financial Accounting Standards Board issued Statements 
of Financial Accounting Standards No. 130 "Reporting Comprehensive Income", 
which requires that an enterprise report, by major components and as a single 
total, the change in its net assets during the period from nonowner sources; 
and No. 131 "Disclosures about Segments of an Enterprise and Related 
Information", which establishes annual and interim reporting standards for an 
enterprise's operating segments and related disclosures about its products, 
services, geographic areas, and major customers. Adoption of these statements 
will not impact the Company's consolidated financial position, results of 
operations or cash flows, and any effect will be limited to the form and 
content of its disclosures. Both statements are effective for fiscal years 
beginning after December 15, 1997, with earlier application permitted.

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

OVERVIEW -- FACTORS THAT MAY AFFECT FUTURE RESULTS

    When used below in connection with matters that may occur in the future,
the words "anticipate", "estimate", "expect" or similar words identify forward
looking statements within the meaning of federal securities laws.  Forward
looking statements below are based on the Company's current expectations of
future events.  The matters described in the forward looking statements are
subject to risks and uncertainties.  The actual results of these matters may
differ substantially from the results anticipated by the Company.  The Company
cannot assure that future results will meet its current expectations.  Risks and
uncertainties relating to forward looking statements and to the Company's
business include, but are not limited to, those described below, under 
"Factors That May Affect Our Business", in the Company's Annual Report on 
Form 10-K for the fiscal year ended December 31, 1996 and in other documents 
that may be subsequently filed with the Commission.

RESULTS OF OPERATIONS

    The following tables set forth, for the periods indicated, certain items in
the Company's consolidated statements of operations as a percentage of net sales
(except for income taxes, which are shown as a percentage of pretax income).  
The results of operations for the six and three month periods ended June 30, 
1997 and 1996 are not necessarily indicative of future results or results to 
be expected for the full year.

                                            Three Months Ended  Six Months Ended
                                                  June 30,         June 30,
                                               1997      1996     1997    1996
                                            ------------------  ----------------
Net sales. . . . . . . . . . . . . . . . .    100.0%     100.0%   100.0%  100.0%
Gross profit . . . . . . . . . . . . . . . .   42.0       41.0     43.0    40.8
Operating expenses . . . . . . . . . . . . .   51.4       52.1     46.5    45.2
Operating income . . . . . . . . . . . . . .   (9.4)     (11.2)    (3.5)   (4.4)
Interest expense . . . . . . . . . . . . . .    1.0        6.6      0.6     5.5
Net income (loss) before provision for 
  income taxes . . . . . . . . . . . . . . .  (10.7)     (17.3)    (4.2)   (9.4)
Provision (benefit) for income taxes . . . .  (39.6)     (37.9)   (39.7)  (39.5)
Net income (loss)  . . . . . . . . . . . . .   (6.5)     (10.7)    (2.5)   (5.7)




THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THREE MONTHS ENDED JUNE 30, 1996

NET SALES.  Net sales increased by 38.3% to $31.1 million from $22.5 million for
the three months ended June 30, 1997 ("Second Quarter 1997") over the three
months ended June 30, 1996 ("Second Quarter 1996").


                                          7
<PAGE>

    Net sales to wholesale customers increased by 48.3% to $25.6 million from
$17.2 million for Second Quarter 1997 compared to Second Quarter 1996.  This
increase was primarily a result of increased unit sales to the Company's
existing wholesale customers resulting from (i) the introduction of new
products, including Tekware, (ii) higher levels of sales of existing products
and (iii) increased sales through the Summit Shop program.

    Company-operated retail sales for Second Quarter 1997 increased by 5.5% to
$5.5 million from $5.2 million for Second Quarter 1997 compared to Second
Quarter 1996.

GROSS PROFIT.  Gross profit as a percentage of net sales for Second Quarter 1997
was 42.0% compared to 41.0% for Second Quarter 1996.  The higher gross margin
was primarily attributable to improved pricing in production.

OPERATING EXPENSES.  Operating expenses, which include selling, marketing, 
and general administrative expenses, increased by 36.4% to $16.0 million from 
$11.7 million for Second Quarter 1997 compared to Second Quarter 1996, 
primarily as a result of increases in variable and fixed costs to support the 
growth of the Company's business.

INTEREST EXPENSE.  Interest expense decreased to $.3 million from $1.5 million
for Second Quarter 1997 compared to Second Quarter 1996 primarily as a result of
the application of the proceeds from the Company's initial public offering in
July 1996 and secondary offering in November 1996 which was used to repay debt.

PROVISION FOR INCOME TAXES. Income tax benefit as a percent of pretax income 
was approximately 40% for Second Quarter 1997 compared to 38% for Second 
Quarter 1996. This increase relates to the mix of the Company's pretax 
earnings between the U.S. and the United Kingdom, which have different tax 
rates.

SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996


NET SALES.  Net sales increased by 31.7% to $70.4 million from $53.5 million for
the six months ended June 30, 1997 (the "First Six Months 1997") compared to the
six months ended June 30, 1996 (the "First Six Months 1996").

    Net sales to wholesale customers increased by 41.9% to $56.9 million from
$40.1 million for First Six Months 1997 compared to First Six Months 1996.  This
increase was primarily a result of increased unit sales to the Company's
existing wholesale customers resulting from (i) the introduction of new
products, including Tekware, (ii) higher levels of sales of existing products
and (iii) increased sales through the Summit Shop program.

    Company-operated retail sales increased by 2.2% to $13.5 million from $13.2
million for First Six Months 1997 compared to First Six Months 1996.  This
increase was due to the addition of the new outlet in July 1996.

GROSS PROFIT  Gross profit as a percentage of sales for First Six Months 1997
was 43.0% compared to 40.8% for First Six Months 1996.  The higher gross margin
was attributable to improved pricing in production as well as lower levels of
discounted sales for Company-operated retail sales.

OPERATING EXPENSES  Operating expenses, which include selling, marketing, and 
general and administrative expenses, increased by 35.4% to $32.7 million from 
$24.2 million for First Six Months 1997 compared to First Six Months 1996, 
primarily as a result of increases in variable and fixed costs to support the 
growth of the Company's business.

INTEREST EXPENSE  Interest expense decreased to $.4 million from $2.9 million
for First Six Months 1997 compared to First Six Months 1996 primarily as a
result of the application of the proceeds from the Company's initial public
offering in July 1996 and secondary offering in November 1996 which was used to
repay debt.


                                          8
<PAGE>

PROVISION FOR INCOME TAXES  Benefits for income taxes as a percent of pretax
loss for First Six Months 1997 approximated the First Six Months 1996 at
approximately 40%.



LIQUIDITY AND CAPITAL RESOURCES

    During the six months ended June 30, 1997, the Company used cash of 
approximately $20.8 million for operations, primarily due to increased levels 
of inventory and accounts receivable. These funds were provided by existing 
cash balances and borrowings under the Company's credit facility.

    Historically, the Company's ability to maintain adequate levels of 
inventory was constrained by its capital resources.  As a result of increases 
in its credit facility, as well as the Company's public offerings in 1996, 
the Company has increased its levels of inventory in order to better enable 
it to meet reorder demand in key products.  The Company anticipates that 
inventory levels will continue to increase as the Company expands its 
business and implements its core inventory replenishment program.  Such 
inventory increases are expected to be financed by borrowings under the 
Company's credit facility.  The increased inventories resulting from this 
core inventory replenishment program may result in increased excess inventory 
and material, increased markdowns and lower margins.

    The Company's credit facility provides for borrowings up to $60.0 million
under its revolving line of credit with actual borrowings limited to available
collateral (approximately $55.3 million of gross availability as of June 30,
1997) and for up to $5.0 million under a term note for capital expenditures
(approximately $5.0 million of remaining availability as of June 30, 1997) from
three financial institutions.  The credit facility also provides a sublimit for
letters of credit of up to $25.0 million to finance the Company's purchases of
merchandise inventories from foreign suppliers.  As of June 30, 1997, the
Company had approximately $9.3 million of letters of credit outstanding under
the credit facility.  The credit facility contains certain financial covenants
that the Company was in compliance with as of June 30, 1997.

    The Company estimates that its capital expenditures in 1997 will be
approximately $13.0 to $15.0 million.  This amount will be used principally for
investment in Summit Shops, the upgrade of management information systems, the
expansion of the Company's administration and distribution facilities, new
technology center, expansion of its European sales and marketing operations and
remodel of existing retail stores.

    The Company anticipates that cash generated from operations, cash available
under the Company's credit facility and through increased bank financing, will
be sufficient to satisfy its cash requirements for at least the next 12 months.

FACTORS THAT MAY AFFECT OUR BUSINESS

Certain statements set forth herein which refer to future financial items,
economic performance or operations 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 effected by a number of
factors, including those set forth below and elsewhere herein.  There may also
be important, unforeseen risks not described herein.


                                          9
<PAGE>

CONSUMER PREFERENCES  Consumer demand for the Company's products may be
adversely effected 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 effected.  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 
and effectively managing 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
write-offs 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, of which there can be no assurance.

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 10 of the manufacturers producing approximately 75% of the
Company's products in 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 facilitate reorders of core
products, and cannot assure that this program will meet reorder requirements or
avoid excess inventory.

KEY SUPPLIERS  Certain important material 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


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<PAGE>

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 supplier's funding of development
costs and co-op advertising arrangements, will continue.

FLUCTUATION 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.  The Company expects to
continue to experience seasonality in the future. Historically, the Company 
has realized substantially all of its profits in the third quarter and has 
recognized losses in the first and second quarters of each year.

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 tariff 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 from 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, and, 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.  In addition, the Company recently 
announced that Roxanna Prahser, its Chief Financial Officer, has resigned in 
order to spend more time with her family.  While the Company is currently 
interviewing candidates to succeed Ms. Prahser as Chief Financial Officer, 
there can be no assurance that the Company will find a suitable candidate in 
the near future. The unanticipated loss of one or more current senior 
executives or key employees, or the failure to adequately replace any 
departed executive or key employee on a timely basis, 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. For example, 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.


                                          11
<PAGE>

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 effected by retail industry, stock market, or economic
factors unrelated to the Company's performance.  Future sales of substantial
amounts of Common Stock by existing stockholders may also adversely effect
prevailing market prices for the Common Stock and could impair the Company's
ability to raise equity capital in the future.


                             PART II.   OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS
         None.

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

         The following matters were approved at the Company's annual meeting 
         of stockholders on May 13, 1997;

         (a) The following class I Directors were elected:
             Name                 For            Withheld
             ----                 ---            --------
             Robert P. Bunje      10,420,216     4,900
             Michael Doyle        10,420,216     4,900

         (b) The ratification of the selection of Deloitte & Touche LLP as 
             independent auditors of the Company for its fiscal year ending
             December 31, 1997:

             For                  Against          Abstain
             ---                  -------          -------
             10,417,461           3,200            4,455



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits
              (11.1)     Computation of Per Share Earnings
              (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-month period ended June 30, 1997.

                                      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: August 14, 1997  By:        /s/  William N. Simon
                                  ------------------------------------
                                  William N. Simon
                                  Chief Executive Officer


     Dated: August 14, 1997  By:        /s/  Roxanna Prahser
                                  ------------------------------------
                                  Roxanna Prahser
                                  Chief Financial Officer
                                  (Principal Financial and Accounting
                                  Officer of the Registrant)


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<PAGE>

                                  INDEX OF EXHIBITS



The following exhibits are included herein:

11.1      Computations of Net Income Per Share

27.1      Financial Data Schedule



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