<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 September 30, 1999


   [_]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
              SECURITIES 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)

407 Merrill Avenue, Carbondale, Colorado                    81623
(Address of principal executive offices)                  (Zip Code)

(970) 704-2300
(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 November 10, 1999, was 12,740,920.

<PAGE>

                             THE NORTH FACE, INC.

                              September 30, 1999

                              INDEX TO FORM 10-Q

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

    Item 1 -  Financial Statements (unaudited)

               Condensed Consolidated Balance Sheets as of September 30, 1999,
               December 31, 1998 and September 30, 1998                              2

               Condensed Consolidated Statements of Operations for the Three
               and Nine Months Ended September 30, 1999 and 1998                     3

               Condensed Consolidated Statements of Cash Flows for the
               Nine Months Ended September 30, 1999 and 1998                         4

               Notes to Condensed Consolidated Financial Statements                  6

    Item 2 -   Management's Discussion and Analysis of Financial Condition and
               Results of Operations                                                 9

    Item 3 -   Quantitative and Qualitative Disclosure About Market Risk            14

PART II.    OTHER INFORMATION

    Item 1 -   Legal Proceedings                                                    15

    Item 6 -   Exhibits and Reports on Form 8-K                                     16

</TABLE>


                                       1
<PAGE>

ITEM 1.  FINANCIAL STATEMENTS


                             THE NORTH FACE, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
              (In thousands, except share and per share amounts)
                                  (unaudited)
<TABLE>
<CAPTION>
                                                                           September 30,   December  31,   September 30,
                                                                               1999            1998            1998
                                                                           -------------   -------------   -------------
ASSETS
<S>                                                                        <C>             <C>             <C>
Current assets:
Cash and cash equivalents                                                      $ 10,068        $ 13,452     $  2,284
Accounts receivable, net                                                         70,479          81,529      103,507
Inventories                                                                      81,767          57,457       58,705
Deferred income taxes                                                             3,679           3,661        2,877
Other current assets                                                              9,175          11,162        7,988
                                                                                -------        --------     --------
  Total current assets                                                          175,168         167,261      175,361

Property and equipment, net                                                      33,543          25,916       23,443
Trademarks and intangibles, net                                                  33,282          33,975       34,397
Debt acquisition costs                                                            1,404           1,730        1,456
Deferred income taxes                                                            14,141              --           --
Other assets                                                                      2,887           3,762        3,422
                                                                                -------        --------     --------
   Total  assets                                                               $260,425        $232,644     $238,079
                                                                               ========        ========     ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, accrued expenses and other current liabilities               $ 37,116        $ 40,463     $ 38,669
Short-term borrowings and current portion of long-term debt and
 capital lease obligations                                                      112,286          55,910       63,157
                                                                               --------        --------     --------
  Total current liabilities                                                     149,402          96,373      101,826
Long-term debt and obligations under capital leases                               1,282           5,360        5,562
Other long-term liabilities                                                       6,954           7,000        6,519
                                                                               --------        --------     --------
  Total liabilities                                                             157,638         108,733      113,907
Minority interest                                                                   642             701          701
Commitments and contingencies (see Note 5)                                           --              --           --

Stockholders' equity:
Common stock, $.0025 par value-shares authorized 50,000,000;
   issued and outstanding; 12,734,000 at September 30, 1999,
   12,494,000 at December 31, 1998 and 12,486,000 at September 30, 1998              32              31           31
Additional paid-in capital                                                      103,870         101,049      101,050
Retained earnings (accumulated deficit)                                          (2,079)         21,660       21,875
Accumulated other comprehensive income-cumulative translation
  adjustments                                                                       322             470          515
                                                                               --------        --------     --------
  Total stockholders' equity                                                    102,145         123,210      123,471
                                                                               --------        --------     --------
  Total liabilities and stockholders' equity                                   $260,425        $232,644     $238,079
                                                                               ========        ========     ========

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

                                       2
<PAGE>

                              THE NORTH FACE, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In thousands, except per share amounts)
                                  (unaudited)
<TABLE>
<CAPTION>


                                         Three Months Ended       Nine Months Ended
                                            September 30,           September 30,
                                        ---------------------  -----------------------
                                           1999       1998        1999         1998
                                        ----------  ---------  -----------  ----------
<S>                                     <C>         <C>        <C>          <C>
Net sales                                $ 70,997   $ 93,645    $ 176,850    $182,520
Cost of sales                              41,475     52,403      100,064     102,443
                                         --------   --------    ---------    --------
Gross profit                               29,522     41,242       76,786      80,077
Operating expenses                         34,876     24,456       94,265      66,034
Other operating expenses                    4,435      3,418        8,876       4,936
                                         --------   --------    ---------    --------
Operating income (loss)                    (9,789)    13,368      (26,355)      9,107
Interest expense                           (2,181)    (1,648)      (4,966)     (3,170)
Other income (expense), net                (3,286)        35       (5,369)        255
                                         --------   --------    ---------    --------
Income (loss) before income taxes         (15,256)    11,755      (36,690)      6,192
Income tax benefit (expense)                4,593     (4,526)      12,951      (2,385)
                                         --------   --------    ---------    --------
Net income (loss)                        $(10,663)  $  7,229    $ (23,739)   $  3,807
                                         ========   ========    =========    ========
Net income (loss) per share:
  Basic                                     $(.84)      $.58       $(1.87)       $.32
  Diluted                                   $(.84)      $.57       $(1.87)       $.31

Weighted average shares outstanding:
  Basic                                    12,733     12,481       12,715      11,996
  Diluted                                  12,733     12,752       12,715      12,263

</TABLE>



See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>

                              THE NORTH FACE, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                  (unaudited)
<TABLE>
<CAPTION>
                                                                                     Nine Months Ended
                                                                                       September 30,
                                                                                    --------------------
                                                                                      1999       1998
                                                                                    ---------  ---------
<S>                                                                                 <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                                                   $(23,739)  $  3,807
Adjustments to reconcile net income (loss) to cash used in operating activities:
  Depreciation and amortization                                                       10,130      5,126
  Loss from the disposal of property and equipment                                       940      1,167
  Issuance of note payable for tender offer expenses                                   2,226         --
  Provision for doubtful accounts                                                      1,747        608
  Tax benefit of exercise of stock options                                               142      1,347
  Other                                                                                   --        (31)
Effect of changes in (net of effects of acquisition):
  Accounts receivable                                                                  3,664    (48,394)
  Inventories                                                                        (24,259)   (10,965)
  Other assets                                                                        (5,670)     1,092
  Accounts payable, accrued expenses and other current liabilities                    (3,397)     6,904
  Decrease in other long-term liabilities                                                (46)        --
                                                                                    --------   --------
NET CASH USED IN OPERATING ACTIVITIES                                                (38,262)   (39,339)
                                                                                    --------   --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash acquired as a result of the purchase of La Sportiva USA                              --        235
Deposit for investment in La Sportiva S.r.l.                                              --     (3,086)
Purchases of property and equipment                                                  (13,307)   (11,422)
Proceeds from the sale of property and equipment                                          --         43
                                                                                    --------   --------
NET CASH USED IN INVESTING ACTIVITIES                                                (13,307)   (14,230)
                                                                                    --------   --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term debt borrowings                                                             10,000         --
Repayments of long-term debt                                                            (775)      (429)
Proceeds from revolver, net                                                           38,987     38,237
Payment of debt acquisition costs                                                         --     (1,525)
Collection of note receivable                                                             --      6,549
Proceeds from issuance of common stock                                                   180      8,312
Redemption of La Sportiva USA preferred stock                                            (59)        --
                                                                                    --------   --------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                             48,333     51,144
                                                                                    --------   --------
Effect of foreign currency fluctuations on cash                                         (148)       198
                                                                                    --------   --------
NET DECREASE IN CASH AND CASH EQUIVALENTS                                             (3,384)    (2,227)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                        13,452      4,511
                                                                                    --------   --------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                            $ 10,068   $  2,284
                                                                                    ========   ========
SUPPLEMENTAL CASH FLOW INFORMATION:
   Cash paid for:
       Interest                                                                     $  4,695         --
       Income taxes                                                                      428         --

</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>

                              THE NORTH FACE, INC.
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - continued
                                 (In thousands)
                                  (unaudited)
<TABLE>
<CAPTION>


                                                                     Nine Months Ended
                                                                       September 30,
                                                                  -----------------------
                                                                    1999        1998
                                                                  -------  --------------
<S>                                                                 <C>    <C>
NON CASH INVESTING ACTIVITY - ISSUANCE OF COMMON
STOCK FOR THE ACQUISITION OF LA SPORTIVA USA:

Purchase of working capital                                         $ ---       $   (798)
Purchase of property and equipment                                    ---            (28)
Assumption of other long-term assets                                  ---            (34)
Assumption of other long-term liabilities                             ---            702
Excess purchase price over the fair value of net assets acquired      ---         (3,835)
Redeemable preferred stock                                            ---            876
                                                                    -----       --------
TOTAL ISSUANCE OF COMMON STOCK FOR THE ACQUISITION
OF LA SPORTIVA USA:                                                 $ ---       $ (3,117)
                                                                    =====       ========

NON CASH FINANCING ACTIVITIES:

Issuance of common stock for note receivable                        $ ---         $6,549
Issuance of common stock for land                                   2,500            ---
Acquisition of property and equipment through capital leases        1,860            ---

</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 U.S. 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, 1998 (the
"Form 10-K"). Operating results for the three and nine months ended September
30, 1999 are not necessarily indicative of the results that may be expected for
the fiscal year ending December 31, 1999.

     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 of only
normal and recurring adjustments, necessary for a fair presentation of the
financial position, 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, 1998, has been
derived from the consolidated balance sheet as of December 31, 1998 included in
the Form 10-K.

     Reclassifications.  Certain reclassifications have been made to the 1998
financial statements to conform to the 1999 presentation.  Such
reclassifications had no effect on net earnings.

NOTE 2.  TERMINATED AGREEMENT TO SELL THE COMPANY

     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
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 they were reevaluating the transactions contemplated
by the Transaction Agreement (the "Transactions").  On July 31, 1999 the Company
announced that it had agreed to extend until August 31, 1999, the termination
date under the Transaction Agreement. In agreeing to this extension, the parties
also agreed to cap at $2.7 million the expenses payable by The North Face to TNF
if the Transactions were not consummated.  On September 1, 1999, the Company
announced that the Transaction Agreement had been terminated.  In September
1999, the  Company  agreed  to pay LGP $2.2 million  in  expenses associated
with  the  terminated

                                       6
<PAGE>

Transaction Agreement. Such transaction expenses are payable in installments to
LGP through June 2000. Also in connection with the termination of the
Transaction Agreement, Jim Fifield resigned as the Company's Chief Executive
Officer. Total expenses incurred in connection with the terminated agreement
during the three and nine months ended September 30, 1999 were $2.3 million and
$3.8 million, respectively, which are included in other expenses.

NOTE 3. CREDIT FACILITY

     In September 1998, the Company entered into a new $130.0 million revolving
credit facility. The credit facility includes a $15.0 million term note facility
and a $115.0 million revolving line of credit facility. The revolving line of
credit provides a sublimit facility for letters of credit up to a maximum of
$40.0 million. The revolving line of credit bears interest at variable rates
(ranging from 7.88% to 9.25% at September 30, 1999). The Company had outstanding
term loans of $15.0 million at September 30, 1999, with interest rates of 7.88%
and 9.25%. The revolving line of credit provides for borrowings up to $115.0
million with the actual borrowings limited to available collateral, representing
eligible receivables and inventory. The credit facility includes certain
financial covenants and restrictions on new indebtedness and the payment of cash
dividends.

     On November 11, 1999, the Company's bank credit facility was amended
whereby the financial covenants were changed and as of December 31, 1999, the
revolving credit facility reduces from $115 million to $100 million. The Company
anticipates that it will be in compliance with its bank covenants for the
remainder of the year. The credit facility now expires on March 31, 2000. The
cost of borrowing under its credit facility will increase approximately 15-20%
as a result of this amendment. There can be no assurance that the Company's cost
of borrowing will not increase even further or that the Company will be able to
maintain compliance with its financial covenants, or that the Company will be
able to refinance its debt when it is due on March 31, 2000. The Company was
charged an amendment fee of $400,000 and is required to pay an additional
$575,000 extension fee if the bank credit facility is not repaid in full by
December 31, 1999. Also, in connection with the amendment, the Company granted
the lender 202,597 contingent warrants to purchase the Company's common stock at
an exercise price of $4.8125 which are exercisable beginning on January 15, 2000
if the bank credit facility is not repaid in full. If the bank credit facility
is repaid in full prior to January 15, 2000, the contingent warrants expire.

NOTE 4.  NEW CORPORATE HEADQUARTERS

     On January 11, 1999, the Company issued 206,188 shares of common stock with
a market value of $12.125 per share as consideration for the purchase of land to
be used for its new corporate headquarters in Carbondale, Colorado.

NOTE 5.  COMMITMENTS AND CONTINGENCIES

     In connection with the Transactions and following the Company's accounting
related announcements which reported the restatement of the Company's 1997
consolidated financial statements and the Company's 1998 interim condensed
consolidated financial statements, several lawsuits have been filed against the
Company.  There can be no assurance that the Company will successfully defend
these lawsuits.  Regardless of whether the Transactions are consummated or of
the outcome of these lawsuits, the Company will likely incur significant related
expenses and costs that could have an adverse effect on the Company's business
and operations.

                                       7
<PAGE>

     During the first week of 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 allege that the Transactions are unfair and
inadequate to the Company's shareholders and charge the defendants with self-
dealing and breach of fiduciary duties.  The various complaints generally
request injunctive relief to prevent the consummation of the Transactions, and
seek other remedies in the event the Transactions are completed. The Company has
not yet responded to these complaints.

     Beginning in March 1999, purported 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 during a time period from January 22, 1998 through April
16, 1999.  The Company believes it has meritorious defenses to these claims and
intends to contest them vigorously.  An unfavorable resolution of the Securities
Litigation could have a material adverse effect on the business, results of
operations or financial condition of the Company.

     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 seeks no recovery.

NOTE 6.  OTHER OPERATING EXPENSES

     During the three and nine months ended September 30, 1999, the Company
recorded expenses of $4.4 and $8.9 million, respectively, related to (i)
relocating a portion of its corporate headquarters to Carbondale, Colorado, (ii)
the closure of its Vacaville, California distribution center and the start-up of
its Lenexa, Kansas distribution center, (iii) professional fees related to the
restatement of the Company's 1997 and 1998 financial statements, and (iv) the
severance of certain executive management personnel.

NOTE 7.  COMPREHENSIVE INCOME (LOSS)

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

<TABLE>
<CAPTION>
                                                       Three  Months Ended                 Nine  Months Ended
                                                           September 30                       September 30
                                                  ------------------------------      -----------------------------
                                                         1999            1998             1999              1998
                                                  ---------------- -------------      -------------- --------------
<S>                                               <C>                  <C>             <C>              <C>
Net income (loss).........................             $(10,663)         $7,229        $(23,739)          $3,807
Other comprehensive income (loss)-
 translation adjustments..................                  651             198            (148)             198
                                                  ---------------- -------------      -------------- --------------
Comprehensive income (loss)...............             $(10,012)         $7,427        $(23,887)          $4,005
                                                  ================ =============      ============== ==============
</TABLE>


                                       8
<PAGE>

NOTE 8.  EARNINGS PER SHARE

     The Company calculates basic earning per share (EPS) by dividing net income
by the weighted average number of common shares outstanding for the period.
Diluted EPS takes into account the effect of dilutive instruments, such as stock
options, and uses the average share price for the period in determining the
number of incremental shares that are to be added to the weighted average number
of shares outstanding.  Diluted EPS for the three and nine months ended
September 30, 1999 exclude any effect of such instruments 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                 Nine Months Ended
                                                           September 30                       September 30
                                                  ------------------------------      -----------------------------
                                                        1999            1998             1999            1998
                                                  ---------------- -------------      -------------- --------------
<S>                                               <C>              <C>                <C>             <C>
Shares used to compute basic EPS..........               12,733          12,481           12,715         11,996
Add:  effect of dilutive securities -
 stock options............................                 ----             271             ----            267
                                                  ---------------- -------------      -------------- --------------
Shares used to compute diluted EPS........               12,733          12,752           12,715         12,263
                                                  ================ =============      ============== ==============
</TABLE>



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 herein, under "Factors
That May Affect Our Business," in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1998 and in other documents that may be
subsequently filed with the Securities and Exchange Commission.

                                       9
<PAGE>

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 three and nine months ended September 30, 1999 and
1998 are not necessarily indicative of future results to be expected for the
full year.

<TABLE>
<CAPTION>

                                        Three Months Ended      Nine Months Ended
                                          September 30,           September 30,
                                      ----------------------  ---------------------
                                         1999        1998        1999       1998
                                      ----------  ----------  ----------  ---------
<S>                                  <C>         <C>         <C>         <C>
Net sales                                 100%        100%        100%       100%
Gross profit                             41.6%       44.0%       43.4%      43.9%
Operating expenses                       49.1%       26.1%       53.3%      36.2%
Other operating expenses                  6.2%        3.6%        5.0%       2.7%
Operating income (loss)                 (13.8%)      14.3%      (14.9%)      5.0%
Interest expense                         (3.1%)      (1.8%)      (2.8%)     (1.7%)
Income (loss) before income taxes       (21.5%)      12.6%      (20.7%)      3.4%
Income tax benefit (expense)             30.1%      (38.5%)      35.3%     (38.5%)
Net income (loss)                       (15.0%)       7.7%      (13.4%)      2.1%
</TABLE>

Three Months Ended September 30, 1999 Compared to Three Months Ended September
30, 1998

Net Sales.  Net sales decreased by 24.2% to $71.0 million from $93.6 million for
the three months ended September 30, 1999 (the "Third Quarter 1999") over the
three months ended September 30, 1998 (the "Third Quarter 1998").

     The decrease in sales was primarily attributable to the decrease in U.S.
wholesale sales of $24.4 million or 44.5% to $30.4 million from $54.8 million in
the Third Quarter 1999 to the Third Quarter 1998 respectively.  This decrease is
primarily attributable to difficulties encountered by the Company when it
outsourced its U.S. distribution of products to a third party distributor.  The
decrease in wholesale sales was partially mitigated by an increase in retail
sales of $3.0 million or 22.7% to $16.0 million compared to $13.0 million in the
prior year.  This increase is primarily due to the opening of four new stores.

Gross Profit. The decrease in gross profit of $11.7 million is primarily related
to a sales decrease in our U.S. wholesale operation of $24.4 million which
resulted in a gross profit decrease of $11.0 million. This decrease is primarily
attributable to difficulties encountered by the Company when it outsourced its
U.S. distribution of products to a third party distributor. In addition, there
was a decline in the gross profit margins in our retail operations of
approximately $1.0 million as a result of liquidation sales to dispose of excess
inventory.

Operating Expenses.  Operating expenses, which include selling, marketing, and
general administrative expenses, increased by 42.6% to $34.9 million from $24.5
million for the Third Quarter 1999 compared to the Third Quarter 1998.
Contributing to the increased costs were additional expenses approximating $3.3
million associated with outsourcing the distribution of the Company's U.S.
products through a third party distributor.  Further, the Company incurred
approximately $2.7 million in additional expenses in the Third Quarter 1999 as
compared to Third Quarter 1998 in connection with its discount and customer
collection programs.  Also contributing to increases in costs for the Third
Quarter 1999 compared to the Third Quarter 1998 was an increase in its
depreciation expense of approximately $1.3 million due to accelerated
depreciation for software costs which are near the end of their useful lives,
increased charges for its summit shop program, and higher depreciation costs
related to furniture, fixtures and equipment in its temporary Carbondale,
Colorado corporate offices. The balance of the increases were primarily due to
increases in variable and fixed costs to support the Company's current business
needs.

                                      10
<PAGE>

Other Operating Expenses. During the Third Quarter 1999, the Company incurred
other operating expenses of $4.4 million which included approximately $1.4
million start-up costs related to the outsourcing of its U.S. products to a
third party distributor and approximately $2.4 million primarily in connection
with the severance of certain executive management personnel. During the Third
Quarter of 1998, the Company incurred costs of approximately $2.4 million
primarily for the relocation of its corporate headquarters to Carbondale,
Colorado.

Interest Expense.  Net interest expense for the Third Quarter 1999 increased to
$2.2 million from $1.6 million for the Third Quarter 1998.  The increase was
primarily due to higher average borrowings during the Third Quarter 1999 as
compared to the Third Quarter 1998 as the Company continues to invest in
upgrading its information technology systems, opening of new outlets, expansion
of its Summit Shop program as well as an overall increase in the scope of its
operating activities.

Other Expenses.  During the Third Quarter 1999, the Company incurred other
expenses of $3.3 million related to the Company's tender offer Transaction
Agreement with TNF Acquisition LLC (see Note 2 of notes to condensed
consolidated financial statements). In connection with the terminated
Transaction Agreement, the Company made a $2.2 million provision for
transaction costs owed to LGP.

Income Tax Benefit (Expense). The effective income tax rate was 30.1% for the
Third Quarter 1999, compared to a 38.5% income tax expense for the Third Quarter
1998.  The change was primarily attributable to state loss carry forward
limitations as well as permanent income tax differences.

Nine Months Ended September 30, 1999 Compared to Nine Months Ended September 30,
1998

Net Sales.  Net sales decreased by 3.1% to $176.9 million from $182.5 million
for the nine months ended September 30, 1999 over the nine months ended
September 30, 1998.

     Net sales to U.S. wholesale customers decreased by 18.4% to $87.6 million
from $107.4 million for the nine months of 1999 compared to the nine months
1998.  This decrease was primarily attributable to difficulties encountered by
the Company when it outsourced its U.S. distribution of products to a third
party distributor.  This sales decrease was offset by increases in European
wholesale sales, La Sportiva USA sales and retail sales of approximately $14.4
million.

Gross Profit.  The decrease in gross profit of $3.3 million is primarily related
to a sales decrease in our U.S. wholesale division of $19.7 million which
resulted in a gross profit decrease of $8.7 million.  In addition to this
decrease there was a decline in the gross profit margins in our retail
operations of approximately $1.4 million or 3.9% as a result of liquidation
sales to dispose of excess inventory.  These decreases were mitigated by sales
increases in our European wholesale sales, La Sportiva USA wholesale sales and
retail sales resulting in gross profit increases of approximately $6.9 million.

Operating Expenses. Operating expenses, which include selling, marketing, and
general administrative expenses, increased by 42.8% to $94.3 million from $66.0
million for the nine months ended September 30, 1999 compared to the nine months
ended September 30, 1998 or $28.2 million.  Contributing to the increased costs
were additional expenses approximating $3.3 million related to the distribution
of the Company's U.S. products to a third party distributor, $2.7 million in
connection its discount and customer collection programs, and $2.1 million
related to accommodations made to two wholesale distribution customers.  In
addition, the Company incurred additional costs in its media and promotional
spending as well as increased costs related to the introduction of its footwear
product line, new product development, information system improvements and
operating costs of new outlets.

                                      11
<PAGE>

Other Operating Expenses.  During the nine months ending September 30, 1999, the
Company incurred other operating expenses of $8.9 million which included
approximately $4.2 million related to the outsourcing of its U.S. products to a
third party distributor and $2.8 million primarily in connection with the
severance of certain executive management personnel. Also contributing to the
increase was costs related to the realignment of its San Leandro, California
facility, relocating a portion of its corporate headquarters to Carbondale,
Colorado, professional fees related to the restatement of its 1997 and 1998
financial statements and establishing a Hong Kong operation.

Interest Expense.  Net interest expense for the nine months 1999 increased to
$5.0 million from $3.2 million for the same period in 1998. The increase is
primarily due to higher average borrowings during the Second and Third Quarter
1999 as the Company continues to invest in upgrading its information technology
systems, opening of new outlets, expansion of its Summit Shop program as well as
an overall increase in the scope of its operating activities.

Other Expenses.  During the first nine months of 1999, the Company incurred
other expenses of $5.4 million of which $3.8 million is related to the Company's
tender offer Transaction Agreement with TNF Acquisition LLC (see Note 2 of notes
to condensed consolidated financial statements) and losses on foreign exchange
contracts.

Income Tax Benefit (Expense). The effective income tax rate was approximately
35.3% for the nine months ended September 30, 1999, compared to a 38.5% for the
nine months ended September 30, 1998.  The change was primarily attributable to
state loss carry forward limitations as well as permanent differences.

FACTORS THAT MAY AFFECT THE COMPANY'S BUSINESS

Key Personnel.  The Board of Directors recently appointed Robert Bunje as the
Chairman of the Board to fill the vacancy created by Marsden Cason's
resignation. In addition, several key members of our senior management team have
recently joined the Company, including Geoffrey D. Lurie, our Chief Executive
Officer and Karl Heinz Salzburger, our President. The Company's future success
will depend upon the ability of these new key employees and our new Chairman to
effectively integrate themselves into our business and to work together as a
management team, and upon the Company's ability to successfully recruit and
retain new directors, executive officers and other key personnel. There can be
no assurance that any of such persons will remain directors, executive officers
or employees of the Company in the future. There can be no assurance that any
existing or newly hired director, executive officer or key employee can
successfully manage or contribute to the Company's operations. To the extent the
Company is not successful in retaining the services of any of its directors,
executive officers or other key personnel and recruiting and retaining the
services of new directors, executive officers or other key personnel, the
Company may not be able to operate its business which may have a significant
adverse effect on the Company's valuation and market price of its Common Stock.

Tender Offer.  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, the Company's former President and Chief
Executive Officer) at $17 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 was terminated on September 1, 1999. In
connection with the termination of the Transaction Agreement, the Company is
required to pay LGP $2.2 million for expenses associated with the terminated
Transaction Agreement.

In connection with the Transaction Agreement and following the Company's
accounting-related announcements, which reported the restatement of the
Company's 1997 Consolidated Financial Statements and 1998 interim Condensed
Consolidated Financial Statements, several lawsuits have been filed against
the Company. There can be no assurance that the Company will successfully
defend these lawsuits. Regardless of the outcome of these lawsuits, the
Company will likely incur significant related expenses and costs that could
have a material adverse affect on the Company's business and operations. See
"Item 3. Legal Proceedings."

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, actual results reported by the Company which may be
better or worse than estimates provided by analysts, sales of common stock by
insiders, speculation in the trade or business press, present and future
litigation, results of such litigation, and recent and future turnover of senior
management.  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 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
September 30, 1999, the Company's directors, officers and certain other
affiliates beneficially owned approximately 9% of the outstanding shares of the
Company's Common Stock.

Outsourcing of Distribution.  In May 1998, the Company initiated outsourcing of
distribution for its business in Canada. In July 1999, the Company initiated
outsourcing of distribution in the U.S. The Company experienced significant
delays and difficulties with its distribution of products since the change in
July. There can be no assurance that the Company will be able to resolve its
distribution difficulties or that third-party outsourcing partners will be able
to service the Company's customers adequately in the future. In addition, the
costs of outsourcing may be greater than anticipated.

Wholesale Strategy.  The Company's wholesale customers currently consist,
primarily, 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 as compared to its sales in Company-owned retail stores,
overall gross margins may decline in the future. Sales returns in excess of
anticipated amounts could have an adverse effect on operations.

Reliance on Unaffiliated Manufacturers.  The Company currently relies on
approximately 35 unaffiliated manufacturers to produce nearly all of its
products, with ten of the manufacturers producing approximately 80% of the
Company's products for the first three quarters of 1999.  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. None of the manufacturers used by the
Company produce the Company's products exclusively. 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 requires its independent manufacturers to operate in compliance with
applicable laws and regulations. Although the Company's internal and vendor
operating guidelines promote ethical business practices and the Company's
sourcing personnel periodically visit and monitor the operations of its
independent manufacturers, the Company does not control these vendors or their
labor practices. The violation of labor or other laws by an independent
manufacturer of the Company, or the divergence of an independent manufacturer's
labor practices from those generally accepted as ethical in the United States,
could result in adverse publicity for the Company and could have a material
adverse effect on the Company.

Consumer Preferences.  Consumer demand for the Company's products may be
adversely affected if consumer interest in outdoor activities does not grow or
declines. In addition, some competitors may have more resources to advertise and
market their products. 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. If consumer interest in outdoor
activities grows, more competitors, who are better financed, may enter the
market.

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. There can be no assurance that the Company
will be successful in obtaining adequate capital to finance its growth
strategies.

Management of Inventory.  Success in the technical outdoor apparel industry is
dependent in part, on a company's ability to manage its inventory of merchandise
in proportion to the demand for such merchandise.  If the Company miscalculates
the consumer demand for its products it may be faced with significant excess
inventory and excess fabric for some products and missed opportunities for
others.  Weak sales and resulting markdowns and/or write-offs could cause the
Company's profitability to be significantly impaired and may have a material
adverse effect on the Company's financial condition and results of operations.

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.
There can be no assurance that the Company will be able to obtain adequate
supplies of technically advanced materials in the future or that favorable
purchase terms or other arrangements with suppliers (such as suppliers' funding
of development costs and co-operative advertising arrangements) will continue.

Fluctuations in Sales.   Sales of the Company's products historically have
fluctuated due to conditions, such as weather and economic recessions or other
conditions which reduce consumer spending, which are beyond the Company's
control.

Risk Associated with Seasonality.  The Company's business, like other retailers,
is subject to seasonal and quarterly fluctuations. The Company's results of
operations may fluctuate from quarter to quarter as a result of, among other
things, the amount and timing of shipments to wholesale customers, government
shipments, the timing and magnitude of discounts in retail stores, the timing of
international licensing and royalty contracts, advertising and marketing
expenditures, increases in the number of employees and costs associated with new
growth and new store openings.

International Operations.  The Company's business is subject to the risks
generally associated with doing business abroad. These risks include adverse
fluctuations in currency exchange rates (particularly those of the U.S. dollar
against certain foreign currencies), changes in import duties or quotas, the
imposition of taxes or other charges on imports, the impact of foreign
government regulation, political unrest, disruption or delays of shipment and
changes in economic conditions in countries in which the Company's suppliers are
located. The Company imports approximately 73% 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. There can be no assurance that the Company's
competition will not develop products that are superior to the Company's
products. Furthermore, 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. 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.

Effect of Certain Provisional Anti-Takeover Effects of Stockholders Rights Plan,
Certificate of Incorporation, Bylaws and Delaware Law.  The Company has adopted
a Stockholder Rights Plan to protect the Company's investors in the event of an
unfriendly takeover. The Stockholder Rights Plan could have the effect of making
it more difficult for a third-party to acquire a majority of the outstanding
voting stock. Further, certain provisions of Delaware law and the Company's
Certificate of Incorporation and Bylaws could delay or make more difficult a
merger, tender offer or proxy contest involving the Company. While such
provisions are intended to maximize stockholder value, they may have the effect
of discouraging takeovers that could be in the best interest of certain
stockholders. There is no assurance that such provisions will not have an
adverse effect on the market value of the Company's Common Stock.

Product and Warranty Liability.  The Company's products are often used in severe
weather and other extreme conditions. For example, in 1997, the Company began
selling portaledges used as sleeping platforms in big wall rock climbing. There
can be 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 many of 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.

Reliance on Management Information Systems.  Currently, the Company is upgrading
its capabilities and systems associated with product acquisition, merchandise
allocation and financial accounting, which have not kept pace with the Company's
growth. The Company has made significant investments to improve existing
management information systems and implement new systems in these areas during
1999. There can be no assurance that these improvements will be successfully
implemented. Failure to implement and integrate such systems could have a
material adverse effect on the Company's business, financial condition and
results of operations.

Year 2000 Compliance. Many currently installed computer systems and software
products are coded to accept only six digit entries in the date code field.
These date code fields will need to accept eight digit entries to distinguish
21st century dates from 20th century dates. As a result, during the next year,
computer systems, software and some non-information technology ("IT") products
used by many companies may need to be upgraded to comply with such "Year 2000"
requirements.

     State of Readiness.  We have conducted an internal review of both our
information systems and significant non-IT systems. We are involved in an
enterprise-wide project to upgrade or modify portions of our software so that
our computer systems will meet Year 2000 requirements. We have been using both
external and internal resources to reprogram or upgrade our software. We plan to
complete the modifications and upgrades, including testing, of all information
systems by early December 1999. No significant Year 2000 problems have been
identified in the Company's non-IT systems.

                                      12
<PAGE>

     Costs to Address the Year 2000 Issue. Based on management's current
estimates, the total cost for addressing the Year 2000 issue is estimated to be
approximately $750,000 of which approximately $611,000 has been incurred through
September 30, 1999.

     Risks Presented by the Year 2000 Issue. We believe that the modifications
and upgrades to our software will mitigate any Year 2000 problems associated
with our internal systems. However, if we do not complete the process of
modifying and upgrading our software in a timely manner, or at all, or if we do
not identify computer information systems and non-IT systems that need to be
upgraded, the Year 2000 issue could have a material impact on our operations. We
have surveyed our significant vendors and other third parties on whom we rely to
ensure that they will convert their systems in a timely manner. We currently are
in the process of analyzing third party responses to our survey. We cannot be
sure that other companies will convert their systems effectively or in a timely
manner. If third parties, such as suppliers, manufacturers and other vendors,
fail to meet Year 2000 requirements, our business could be materially adversely
affected.

     Contingency Plans. The Company's Year 2000 plan includes the development of
contingency plans in the event that the Company has not completed all of its
remediation plans in a timely manner or any third parties who provide goods or
services essential to the Company's business fail to appropriately address their
Year 2000 issues. The Company plans to conclude the development of these plans
by November 1999.

LIQUIDITY AND CAPITAL RESOURCES

     In September 1998, the Company entered into a new $130.0 million revolving
credit facility. The credit facility includes a $15.0 million term note facility
and a $115.0 million revolving line of credit facility. The revolving line of
credit provides a sublimit facility for letters of credit up to a maximum of
$40.0 million. The revolving line of credit bears interest at variable rates
(ranging from 7.88% to 9.25% at September 30, 1999). The Company had outstanding
term loans of $15.0 million at September 30, 1999, with interest rates of 7.88%
and 9.25%. The revolving line of credit provides for borrowings up to $115.0
million with the actual borrowings limited to available collateral, representing
eligible receivables and inventory. The credit facility includes certain
financial covenants and restrictions on new indebtedness and the payment of cash
dividends.

                                      13
<PAGE>

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

     Effective November 11, 1999, the Company's bank credit facility was amended
to reflect certain changes in the financial covenants, among other things. As of
December 31, 1999 the revolving credit facility reduces from $115 million to
$100 million. The Company currently anticipates that it will be in compliance
with its bank covenants for the remainder of the year. The credit facility now
expires on March 31, 2000. The cost of borrowing under its credit facility will
increase approximately 15-20% as a result of this amendment. There can be no
assurance that the Company's cost of borrowing will not increase even further or
that the Company will be able to maintain compliance with its financial
covenants, or that the Company will be able to refinance its debt when it is due
on March 31, 2000. The Company was charged an amendment fee of $400,000 and is
required to pay an additional $575,000 extension fee if the bank credit facility
is not repaid in full by December 31, 1999. Also, in connection with the
amendment, the Company granted the lender 202,597 contingent warrants to
purchase the Company's common stock at an exercise price of $4.8125 which are
exercisable beginning on January 15, 2000 if the bank credit facility is not
repaid in full. If the bank credit facility is repaid in full prior to January
15, 2000, the contingent warrants expire.

     The Company anticipates that it will be able to operate its business within
the maximum line available under the Company's credit facility; however, it
expects to seek additional financing over the course of the next several months
to support the growth of the Company's business. There can be no assurance that
the Company will not require additional capital in 1999 or in subsequent years
or that it will be able to obtain such capital if required.

          The Company estimates that its capital expenditures for all 12 months
of 1999 will be approximately $16.0 to $18.0 million.  For the nine months ended
September 30, 1999, capital expenditures, including property and equipment
financed through capital leases, totaled approximately $15.2 million. Capital
expenditures will be used principally for investing in summit shops, the upgrade
of management information systems, the opening of outlet stores and store
upgrades general corporate purposes.

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.

     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 United States dollar and the local
currencies of the contract manufacturers, which may have the effect of
increasing the Company's cost of goods 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.

                                      14
<PAGE>

     The Company sources product in U.S. dollars and sells product throughout
the world, but primarily in the United States, Canada and Europe.  To reduce the
Company's exposure to changes in the U.S. dollar value of foreign sales and
receivables the Company enters into forward options and contracts.  This hedging
of foreign exchange risk is carried out on a seasonal basis with each season
running for six months of the year, spring being January through June and Fall
being July through December.  In general, the Company hedges for the current
season and the next season.

     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 hedged any
forward transactions; (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 affected by changes in
market interest rates.

     Inflation Risk.  The Company believes that the relatively moderate rates of
inflation over the last two 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.

PART II.  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

     During the first week of 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 "Transactions") contemplated by the Transaction Agreement
dated February 27, 1999, between the Company and TNF Acquisition LLC. The
complaints, filed on behalf of a purported class of the Company's shareholders,
generally allege that the Transactions are unfair and inadequate to the
Company's shareholders and charge the defendants with self-dealing and breach of
fiduciary duties. The various complaints generally request injunctive relief to
prevent the consummation of the Transactions, and seek other remedies in the
event the Transactions are completed. The Company has not yet responded to these
complaints.

     Beginning in March 1999, purported 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 during a time period from January 22, 1998 through April 16, 1999. The
Company believes it has meritorious defenses to these claims and intends to
contest them vigorously. An unfavorable resolution of the Securities Litigation
could have a material adverse effect on the business, results of operations or
financial condition of the Company.

                                      15
<PAGE>

     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 seeks no recovery.

ITEM 5.  OTHER INFORMATION

     In November 1999, the Company entered into employment agreements with each
of Geoffrey D. Lurie and Karl Heinz Salzburger.

     The North Face (Italy) S.r.l. entered into a separate employment
agreement with Karl Heinz Salzburger in November 1999.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

2.1(6)    Stock Purchase Agreement, dated as of July 1, 1998, among The North
Face, Inc. and  La Sportiva USA, Inc.

2.2(6)    Registration Rights Agreement dated as of July 1, 1998, among The
North Face, Inc. and the stockholders of La Sportiva USA, Inc.

2.3(11)   Transaction Agreement, dated as of February 27, 1999, by and between
the Registrant and TNF Acquisition LLC, a Delaware limited liability company
whose sole member is Green Equity Investors III, L.P., a Delaware limited
partnership.

2.4(12)   Amendment to Transaction agreement with TNF Acquisition LLC dated
July 31, 1999.

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

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

10.1(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.

10.2(7)** Management Stock Pledge Agreement, dated as of May 13, 1998, among The
North Face, Inc., and James G.  Fifield.

10.3(1)   Stock Purchase Agreement, dated as of December 28, 1993, between TNF
Holdings Company, Inc.* and Kabushiki Kaisha Goldwin, as amended by Memorandum,
dated as of March 29,1994, among TNF Holdings Company, Inc.* and Kabushiki
Kaisha Goldwin, and Memorandum No.  2, dated as of May 20, 1994, between TNF
Holdings Company, Inc.* and Kabushiki Kaisha Goldwin.

10.4(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.

10.5(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.

                                      16
<PAGE>

10.6(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.

10.6A(1)  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.

10.6B(3)  Third Amended and Restated Loan and Security Agreement, dated as of
April 7, 1997, between The North Face, Inc. and Heller Financial, Inc., as Agent
and as a Lender.

10.7(2)** TNF Holdings Company, Inc.* 1994 Stock Incentive Plan, as amended.

10.8(5)** The North Face, Inc. 1995 Stock Incentive Plan, as amended.

10.9(1)** The North Face, Inc. 1996 Stock Incentive Plan.

10.9A(10)** The North Face, Inc. 1996 Stock Incentive Plan, as amended September
1, 1998.

10.10(1)** The North Face, Inc. 1996 Employee Stock Purchase Plan.

10.11(1)** The North Face, Inc. 1996 Directors' Stock Option Plan.

10.12(9)** The North Face, Inc. 1998 Nonstatutory Stock Option Plan.

10.13(1)  Trademark License, dated October 29, 1993, between The North Face and
W.L. Gore & Associates, Inc.

10.14(10) Trademark License, dated September 30, 1998, between The North Face,
Inc. and Youngone Corporation.

10.15(8)  Loan Agreement dated as of September 2, 1998 (the "Loan Agreement")
between The North Face, Inc., The North Face (Europe) Limited and The North
Face, Hong Kong, Limited as Borrowers, The Industrial Bank of Japan, Limited,
New York Branch and IBJ Schroder Business Credit Corporation as Arrangers, The
Industrial Bank of Japan, Limited, New York Branch as Syndication Agent,
Documentation Agent and as a Lender, IBJ Schroder Business Credit Corporation as
Administrative Agent, Collateral Agent and as a Lender, and Certain Financial
Institutions.

10.15A(8) Amendment to the Loan Agreement, dated as of September 11, 1998.

10.15B(13) Amendment and Waiver Agreement, dated as of August 13, 1999.

10.15C  Amendment No. 4 to the Loan Agreement, dated as of November 11,
1999.

10.16(4)  First Amendment and Purchase Agreement dated June 15, 1998 by and
between The North Face, Inc., Gianinetti Investment Corp., R.P. Sewell &
Company, a Colorado Partnership, Richard Bradley and David F. Baggerman and
Agreement to Amend/Extend Contract dated December 24, 1998 by and between The
North Face, Inc., Gianinetti Investment Corp., R.P. Sewell & Company, a Colorado
Partnership, Richard Bradley and David F. Baggerman.

10.17     Employment Agreement, dated as of November 4, 1999, between The North
Face and Geoffrey D. Lurie.

10.18     Employment Agreement, dated as of November 4, 1999, between The North
Face and Karl Heinz Salzburger.

10.19     Employment Agreement, dated as of November 1, 1999, between The North
Face and Karl Heinz Salzburger.


                                      17
<PAGE>

27.1 Financial Data Schedule

(1)  Incorporated by reference to the Company's Registration Statement on Form
     S-1 (No. 333-04107) filed on May 20, 1996 and amendments thereto, filed
     with the Securities and Exchange Commission on 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.

(3)  Incorporated by reference to the Company's Annual Report on Form 10-K for
     the fiscal year ended December 31, 1997 filed with the Securities and
     Exchange Commission on March 6, 1998.

(4)  Incorporated by reference to the Company's Registration Statement on Form
     S-3 (No. 333-70405) filed with the Securities and Exchange Commission on
     January 11, 1999.

(5)  Incorporated by reference to the Company's Annual Report on Form 10-K for
     the fiscal year ended December 31, 1996 filed with the Securities and
     Exchange Commission on March 28, 1997.

(6)  Incorporated by reference to the Company's Registration Statement on Form
     S-3 (No. 333-58629) filed with the Securities and Exchange Commission on
     July 7, 1998.

(7)  Incorporated by reference on Schedule 13D  filed with the Securities and
     Exchange Commission on May 13, 1998.

(8)  Incorporated by reference to the Company's Report on Form 10-Q for the
     period ended September 30, 1998 filed with the Securities and Exchange
     Commission on November 13, 1998.

(9)  Incorporated by reference to the Company's Registration Statement on Form
     S-8 (No. 59003) filed with the Securities and Exchange Commission on July
     14, 1998.

(10) Incorporated by reference to the Company's Annual Report on Form 10-K for
     the fiscal year ended December 31, 1998 filed with the Securities and
     Exchange Commission on May 7, 1999.

(11) Incorporated by reference to the Company's Report on Form 8-K filed with
     the Securities and Exchange Commission on March 5, 1999.

(12) Incorporated by reference to the Company's Report on Form 8-K filed with
     the Securities and Exchange Commission on August 17, 1999.

(13) Incorporated by reference to the Company's Report on Form 10-Q for the
     period ended June 30, 1999 filed with the Securities and Exchange
     Commission on August 16, 1999.

*    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.

     (b)  Reports on Form 8-K

     Form 8-K filed on August 17, 1999 contained an Amendment to the Transaction
Agreement between the Company and TNF Acquisition LLC, an affiliate of Leonard
Green & Partners, L.P. extending the termination date of the Transaction
Agreement to August 31, 1999. The Form 8-K also contained the August 2, 1999
press release reporting the extension of the termination date of the Transaction
Agreement to August 31, 1999.

                                      18
<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:  November 15, 1999                By:  /s/  Geoffrey D. Lurie
                                              ---------------------------------
                                              Chief Executive Officer


                                      19
<PAGE>

                               INDEX OF EXHIBITS

The following exhibits are included herein:

10.15C  Amendment No. 4 to the Loan Agreement, dated as of November 11, 1999.

10.17   Employment Agreement, dated as of November 4, 1999, between The North
Face and Geoffrey D. Lurie.

10.18   Employment Agreement, dated as of November 4, 1999, between The North
Face and Karl Heinz Salzburger.

10.19   Employment Agreement, dated as of November 1, 1999, between The North
Face and Karl Heinz Salzburger.

27.1    Financial Data Schedule

                                      20