<PAGE>
 
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC  20549
                                        
                                  FORM 10-Q/A


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

                  For the quarterly period ended September 30, 1998

              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)

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

                                (970) 704-2300
             (Registrant's telephone number, including area code)

              2013 Farallon Drive, San Leandro, California  94577
             (Former name, former address and former 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              No    X
    -------         -------


The number of shares of Common Stock, $0.0025 par value per share, outstanding
on April 30, 1999, was 12,725,656.

                                       1
<PAGE>
 
                             THE NORTH FACE, INC.

                              SEPTEMBER 30, 1998


                             INDEX TO FORM 10-Q/A

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

     Item 1 - Financial Statements (unaudited)

                 Condensed Consolidated Balance Sheets as of September 30, 1998
                   (Restated), December 31, 1997 and September 30, 1997............................................    3

                 Condensed Consolidated Statements of Operations for the Three and
                    Nine Months Ended September 30, 1998 (Restated) and 1997.......................................    4

                 Condensed Consolidated Statements of Cash Flows for the
                    Nine Months Ended September 30, 1998 (Restated) and 1997.......................................    5

                 Notes to Condensed Consolidated Financial Statements..............................................    7

     Item 2 - Management's Discussion and Analysis of Financial Condition and
                Results of Operations..............................................................................   12


PART II.      OTHER INFORMATION

     Item 1 - Legal Proceedings....................................................................................   17

     Item 6 - Exhibits and Reports on Form 8-K.....................................................................   18
</TABLE>
                                       2
<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,
                                                                       1998           1997           1997
                                                                  -------------   ------------  -------------
                             ASSETS                                  RESTATED
                                                                   (See Note 7)
<S>                                                               <C>             <C>           <C>
Current assets:
Cash and cash equivalents.......................................       $  2,284       $  4,511       $  1,184
Accounts receivable, net........................................        103,507         54,857         78,461
Inventories.....................................................         58,705         46,682         42,253
Deferred taxes..................................................          2,877          2,865          2,478
Other current assets............................................          7,988          9,046          3,889
                                                                  -------------   ------------  -------------
  Total current assets..........................................        175,361        117,961        128,265
Property and equipment, net.....................................         23,443         17,524         17,862
Trademarks and intangibles, net.................................         34,397         29,066         29,271
Debt acquisition costs..........................................          1,456             27             53
Other assets....................................................          3,422          2,871          2,272
                                                                  -------------   ------------  -------------
  Total assets..................................................       $238,079       $167,449       $177,723
                                                                  =============   ============  =============
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, accrued expenses and other                           $ 38,669       $ 30,232       $ 34,216
  current liabilities...........................................
Short-term borrowings and current portion of                             
  long-term debt and capital lease obligations..................         63,157         25,734         33,139
                                                                  -------------   ------------  -------------
  Total current liabilities.....................................        101,826         55,966         67,355
Long-term debt and obligations under capital                              
  Leases........................................................          5,562          5,177          4,976
Other long-term liabilities.....................................          6,519          6,165          6,646
                                                                  -------------   ------------  -------------
  Total liabilities.............................................        113,907         67,308         78,977
                                                                  -------------   ------------  -------------
Minority interest...............................................            701             --             --
Stockholders' equity:
Common stock, $.0025 par value -- shares authorized                            
  50,000,000; 12,486,000 issued and outstanding at
  September 30, 1998; 11,502,000 at December 31, 1997;
  and 11,258,000 at September 30, 1997..........................             31             29             29
Additional paid-in capital......................................        101,050         81,727         79,578
Subscriptions receivable........................................             --             --             (2)
Retained earnings...............................................         21,875         18,068         19,108
Accumulated other comprehensive income -                                    
  cumulative translation adjustments............................            515            317             33
                                                                  -------------   ------------  -------------
  Total stockholders' equity....................................        123,471        100,141         98,746
                                                                  -------------   ------------  -------------
  Total liabilities and stockholders' equity....................       $238,079       $167,449       $177,723
                                                                  =============   ============  =============
</TABLE>
     See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>
 
                              THE NORTH FACE, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                   (In thousands, except per share amounts)
                                  (unaudited)
<TABLE>
<CAPTION>
                                                          Three Months Ended              Nine Months Ended
                                                            September 30,                   September 30,
                                                          -------------------            --------------------
                                                            1998        1997               1998       1997
                                                          ---------  --------            ---------  ---------
                                                          RESTATED                       RESTATED  
                                                        (See Note 7)                   (See Note 7)
<S>                                                     <C>           <C>                <C>         <C>
Net sales.............................................      $93,645   $87,007             $182,520   $157,436
Cost of sales.........................................       52,403    47,318              102,443     87,491
                                                          ---------  --------            ---------  ---------
Gross profit..........................................       41,242    39,689               80,077     69,945
Operating expenses....................................       24,456    20,802               66,034     53,550
Other operating expenses..............................        3,418       --                 4,936        --
                                                          ---------  --------            ---------  ---------
Operating income......................................       13,368    18,887                9,107     16,395
Interest expense......................................       (1,648)     (910)              (3,170)    (1,330)
Other income (expense), net...........................           35      (125)                 255       (150)
                                                          ---------  --------            ---------  ---------
Income before provision for income taxes..............       11,755    17,852                6,192     14,915
Provision for income taxes............................        4,526     7,085                2,385      5,920
                                                          ---------  --------            ---------  ---------
Net income............................................      $ 7,229   $10,767             $  3,807   $  8,995
                                                          =========  ========            =========  =========

Net income per share:
  Basic...............................................        $0.58     $0.96                $0.32      $0.80
  Diluted.............................................        $0.57     $0.92                $0.31      $0.77

Weighted average shares outstanding:
  Basic...............................................       12,481    11,262               11,996     11,260
  Diluted.............................................       12,752    11,708               12,263     11,667
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>
 
                              THE NORTH FACE, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                  (unaudited)
<TABLE>
<CAPTION>
                                                                                                      Nine Months Ended
                                                                                                        September 30,
                                                                                              --------------------------------
                                                                                                  1998                   1997
                                                                                              -----------          -----------
<S>                                                                                             <C>                <C>
                                                                                                RESTATED 
                                                                                              (See Note 7)
CASH FLOW FROM OPERATING ACTIVITIES:                                                                
NET INCOME............................................................................           $  3,807             $  8,995
Adjustments to reconcile net income to cash used in operating activities:
  Depreciation and amortization.......................................................              5,126                3,269
  Loss from the disposal of property and equipment....................................              1,167                   --
  Provision for doubtful accounts.....................................................                608                  207
  Tax benefit of exercise of stock options............................................              1,347                3,067
  Other...............................................................................                (31)                  12
 Changes in operating assets and liabilities (net of effects of acquisition):
  Accounts receivable.................................................................            (48,394)             (51,116)
  Inventories.........................................................................            (10,965)             (10,778)
  Income tax receivable...............................................................              2,361                   --
  Other assets........................................................................             (1,269)              (6,002)
  Accounts payable, accrued expenses and other liabilities............................              6,904               14,830
                                                                                              -----------          -----------
NET CASH USED IN OPERATING ACTIVITIES.................................................            (39,339)             (37,516)
                                                                                              -----------          -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash acquired as a result of the purchase of La Sportiva USA..........................                235                   --
Investment in La Sportiva, S.r.l......................................................             (3,086)                  --
Purchases of property and equipment...................................................            (11,422)              (7,591)
Other.................................................................................                 43                   --
                                                                                              -----------          -----------
NET CASH USED IN INVESTING ACTIVITIES.................................................            (14,230)              (7,591)
                                                                                              -----------          -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term debt proceeds...............................................................                 --                6,706
Repayments of long-term debt..........................................................               (429)                (300)
Proceeds from revolver, net...........................................................             38,237               31,479
Payment of debt acquisition costs.....................................................             (1,525)                 (94)
Collection of note receivable.........................................................              6,549                   --
Proceeds from issuance of stock.......................................................              8,312                  474
                                                                                              -----------          -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES.............................................             51,144               38,265
                                                                                              -----------          -----------
Effect of foreign currency fluctuations on cash.......................................                198                 (289)
                                                                                              -----------          -----------
DECREASE IN CASH AND CASH EQUIVALENTS.................................................             (2,227)              (7,131)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD........................................              4,511                8,315
                                                                                              -----------          -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD..............................................           $  2,284             $  1,184
                                                                                              ===========          =========== 
</TABLE>
                                                                                
                         Continued on following page.

                                       5
<PAGE>
 
                              THE NORTH FACE, INC.
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - continued
                                 (In thousands)
                                  (unaudited)
<TABLE>
<CAPTION>
                                                                                                     Nine Months Ended
                                                                                                       September 30,
                                                                                              --------------------------------
                                                                                                  1998                1997
                                                                                              -----------          -----------
                                                                                                RESTATED  
                                                                                              (See Note 7)
<S>                                                                                           <C>                  <C>
NONCASH 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)               $  --
                                                                                              ===========          ===========

SUPPLEMENTAL CASH FLOW INFORMATION:
  Noncash Financing Activities:
      Issuance of common stock for note receivable....................................            $ 6,549                $  --
</TABLE>

    See accompanying notes to condensed consolidated financial statements.

                                       6
<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 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/A for the fiscal
year ended December 31, 1997 (the "Form 10-K/A").  Operating results for the
nine month period ended September 30, 1998 are not necessarily indicative of the
results that may be expected for the fiscal year ending December 31, 1998.

     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/A.  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, 1997, has been
derived from the Consolidated Balance Sheet as of December 31, 1997 included in
the Form 10-K/A.

     Reclassifications.  Certain reclassifications have been made to the 1997
interim financial statements to conform to the 1998 presentation.  Such
reclassifications had no effect on net earnings.

NOTE 2.  RECENTLY ISSUED ACCOUNTING STANDARDS

     In the first quarter of 1998, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income," which
established standards for reporting and displaying comprehensive income and its
components in financial statements.  Comprehensive income is defined as a change
in equity from transactions and other events and circumstances from nonowner
sources.  Accumulated other comprehensive income consists entirely of foreign
currency translation adjustments.  Total comprehensive income for the quarters
ended September 30, 1998 and 1997 was $7,427,000 and $10,523,000, respectively
and $4,005,000 and $8,706,000 for the nine months ended September 30, 1998 and
1997, respectively.

     In June 1998, the Financial Accounting Standards Board issued SFAS No. 133
"Accounting for Derivative Instruments and Hedging Activities".  SFAS No. 133
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities.  The statement requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. This statement is
effective for fiscal years beginning after June 15, 1999 and is not to be
applied retroactively to financial statements for prior periods. Management is
in the process of evaluating what impact, if any, SFAS No. 133 will have on the
Company's financial statements.

                                       7
<PAGE>
 
NOTE 3.  OTHER OPERATING EXPENSES

     During the quarter ended September 30, 1998 the Company recorded expenses
of $3,418,000, related to (i) relocating a portion of its corporate headquarters
to Carbondale, Colorado; (ii) the realignment of its San Leandro, California
facility; and (iii) establishing a Hong Kong operation to facilitate its
sourcing in Asia.  The Company expects to spend another $2.6 to $3.6 million in
operating expenses related to these efforts primarily over the next 18 months.
During the nine months ended September 30, 1998 the Company recorded a charge of
$1,518,000, related to the closing of an out-dated manufacturing facility in
Scotland, the integration of its Canadian subsidiary into a combined North
American business operation, and the termination of its German sales agent.

NOTE 4.   INVESTMENTS IN LA SPORTIVA BUSINESSES

     On July 2, 1998, the Company acquired a 20% interest in La Sportiva S.r.l.,
a premier manufacturer and distributor of trekking, mountaineering, and climbing
footwear located in Ziano di Fiemme, Italy for a purchase price of $2.5 million,
and incurred direct costs of approximately $0.6 million, for a total purchase
price of approximately $3.1 million.  In August 1998, La Sportiva S.r.l. changed
its name to La Sportiva S.p.A.  The majority shareholders of La Sportiva S.p.A.
have a "put option" which may require the Company to purchase, in a single
transaction, an additional 31% interest in La Sportiva S.p.A. for 6.8 billion
lira ($4.1 million at September 30, 1998).  This put option may be exercised at
any time during the period beginning on July 1, 2000 and ending on July 1, 2003.
After the expiration of the "put option" and until December 31, 2004, the
Company may exercise a "call option" which, if exercised, would require the
majority shareholders of La Sportiva S.p.A. to sell an additional 31% interest
to the Company for 6.8 billion lira ($4.1 million at September 30, 1998).  The
Company has accounted for its 20% interest in La Sportiva S.p.A. under the
equity method.  The purchase price of La Sportiva S.p.A. exceeded the Company's
proportionate share of the net assets acquired by $2.4 million, which was
recorded as goodwill and is being amortized on a straight line basis over 40
years.

     In a related transaction on July 2, 1998, the Company acquired 100% of the
outstanding common stock of La Sportiva USA, (which owns the exclusive rights to
distribute footwear for La Sportiva S.p.A. in the United States) located in
Boulder, Colorado, for a purchase price of approximately $3.9 million.  The
purchase price includes $3.1 million which was paid in 133,335 shares of the
Company's Common Stock and additional $0.8 million in cash to be paid to the
former owners of La Sportiva USA over the next five years.

     The purchase price of La Sportiva USA exceeded the fair value of the net
assets acquired by approximately $3.8 million, which was recorded as goodwill
and is being amortized on a straight line basis over 40 years.  The fair value
of the net assets acquired is based on preliminary estimates, which are subject
to change. The acquisition was recorded under the purchase method of accounting.
The Company has consolidated the results of La Sportiva USA beginning on July 2,
1998.

     Pro forma financial information is not presented for the acquisition of La
Sportiva USA as the effect of the acquisition was not material to the
consolidated results of operations of the Company for the three and nine months
ended 1998 and 1997.

NOTE 5.  STOCK OPTION REPRICING

     During the quarter ended September 30, 1998, options to purchase 1,803,650
shares of common stock were repriced from a weighted average exercise price of
$19.65 to a weighted average exercise price of $9.625 which was equal to fair
market value at the date of repricing.  Options issued to certain of the
Company's outside Directors and certain others were not included in the
repricing.

                                       8
<PAGE>
 
NOTE 6.  NEW CREDIT FACILITY
 
     In September 1998, the Company entered into a new five year Global Senior
Secured Revolving Credit Facility (the "New Credit Facility") with The
Industrial Bank of Japan, Limited, New York Branch (as syndication agent and
documentation agent), and IBJ Whitehall Business Credit Corporation (as
arrangers, collateral agent and as administrative agent for itself and the other
lenders), and other financial institutions (the "Financial Institutions"). The
New Credit Facility includes a term note, a revolving line of credit and a
letter of credit facility. The term note (availability up to $15,000,000) is
payable in equal quarterly installments based on five year amortization of the
outstanding term loan from the last day of the term loan availability period
with payments commencing on October 1, 1999, but the outstanding principal
balance shall be due and payable in full on the termination date which is
September 2003. The term note carries interest payable monthly at the higher of
(a) the bank's base commercial lending rate minus one-half of one percent (.50%)
and (b) one-half of one percent (.50%) above the federal funds effective rate
plus the applicable margin. The Company had an outstanding $5,000,000 term note
as of December 31, 1998, with the interest rate of 7.25%. The revolving line of
credit provides for borrowing up to $115 million with the actual borrowings
limited to available collateral, representing eligible receivables and inventory
(approximately $91.9 million of gross availability as of December 31, 1998, of
which the Company borrowed $55.1 million at December 31, 1998). Interest on the
revolving line of credit is payable monthly at a rate of either (1) the prime
rate which is the higher of (a) the bank's base commercial lending rate minus
 .50% and (b) .50% above the federal funds effective rate plus the applicable
margin, or (2) LIBOR plus the applicable margin, at the option of the Company.
The average interest rate was 7.15% at December 31, 1998. The revolving line of
credit agreement provides a sublimit facility for letters of credit up to a
maximum of $40 million (approximately $10.5 million outstanding as of December
31, 1998). Fees for outstanding letters of credit are payable quarterly at 1.5%
per annum. The Company also pays a monthly unused line fee on the revolver at
 .375% per annum. Borrowings and outstanding letters of credit under the New 
Credit Facility are secured by substantially all of the assets of the Company.
The New Credit Facility includes certain financial covenants and restrictions on
new indebtedness and the payment of cash dividends. On May 3, 1999, the Company
received a written waiver from the Financial Institutions for violations of
certain of the Company's non-financial covenants as set forth in the agreements 
relating to the New Credit Facility.

NOTE 7. RESTATEMENT

     Subsequent to the issuance of the Company's Condensed Consolidated
Financial Statements for the three and nine months ended September 30, 1998, the
Company's management determined that certain barter transaction revenue had been
improperly recognized, certain guarantees and severance costs primarily related
to the move to Colorado had not been properly accrued and certain capitalized
costs related to information systems and consulting costs had not been expensed.
Certain property, abandoned in connection with the move to Colorado, should have
been written off during the three months ended September 30, 1998, rather than
the three months ended December 31, 1998. Additionally, the revenue associated
with a certain wholesale distributor was reversed because sales accounting was
not consistent with certain terms of that transaction which were designed to
avoid distribution into inappropriate channels and preserve The North Face
brand. The Company also determined that its investment in La Sportiva S.r.l.
should have been recorded under the equity method of accounting. As a result,
the accompanying Condensed Consolidated Financial Statements as of and for the
three and nine months ended September 30, 1998, have been restated from amounts
previously reported. The effects of the restatement have been reflected herein.

     In addition to the restatements reflected herein, the Company has also 
restated its previously issued Consolidated Financial Statements for the year 
ended December 31, 1997 and its previously issued Condensed Consolidated 
Financial Statements for the three and six months ended March 31, 1998 and June 
30, 1998. See the Form 10-K/A and the Company's Quarterly Reports on Form 10-Q/A
for the three and six months ended March 31, 1998 and June 30, 1998.

                                       9
<PAGE>
 
     A summary of the effects of the restatement as of September 30, 1998 and
for the three and nine months then ended follows:
<TABLE>
<CAPTION>
                                                        Three Months Ended                       Nine Months Ended
                                                           September 30,                            September 30,
                                                  -----------------------------            -----------------------------    
                                                       1998            1998                     1998           1998
                                                  -------------   -------------            -------------   -------------    
                                                    PREVIOUSLY                               PREVIOUSLY 
                                                     REPORTED       RESTATED                  REPORTED       RESTATED
                                                         (In thousands,                            (In thousands, 
                                                   except per share amounts)                  except per share amounts)
                                                          (unaudited)                                (unaudited)
<S>                                              <C>              <C>                      <C>             <C>
Net sales...............................               $103,800         $93,645                 $194,162        $182,520
Cost of sales...........................                 57,425          52,403                  107,806         102,443
Operating expenses......................                 24,552          24,456                   65,264          66,034
Other operating expenses................                  2,215           3,418                    3,835           4,936
Interest expense........................                 (1,825)         (1,648)                  (3,347)         (3,170)
Other income (expense), net.............                     12              35                      232             255
Income before provision for income taxes                 17,795          11,755                   14,142           6,192
Provision for income taxes..............                  7,029           4,526                    5,586           2,385
Net income..............................                 10,766           7,229                    8,556           3,807
Net income per share:
 Basic..................................               $   0.86         $  0.58                 $   0.71        $   0.32
 Diluted................................               $   0.84         $  0.57                 $   0.70        $   0.31
</TABLE>
<TABLE>
<CAPTION>
                                                                           September 30,            September 30,
                                                                                1998                    1998
                                                                           ------------             ------------  
                                                                            PREVIOUSLY
                                                                             REPORTED                 RESTATED
                                                                                       (In thousands)
                                                                                         (unaudited)
<S>                                                                         <C>                      <C>
Total current assets........................................                    186,406                  175,361
Property and equipment, net.................................                     30,971                   23,443
Trademarks and intangibles, net.............................                     36,889                   34,397
Debt acquisition costs......................................                      1,495                    1,456
Other assets................................................                      4,674                    3,422
Total current liabilities...................................                    106,379                  101,826
Long-term debt and obligations under capital leases.........                     12,952                    5,562
Other long-term liabilities.................................                      7,925                    6,519
Minority interest...........................................                      1,653                      701
Additional paid-in capital..................................                    100,933                  101,050
Retained earnings...........................................                     29,776                   21,875
Accumulated other comprehensive income--                                                                         
 cumulative translation adjustments.........................                        786                      515 
</TABLE>

NOTE 8.  SUBSEQUENT EVENTS

     In the Fourth Quarter 1998, the Company finalized licensing and royalty
agreements to sell The North Face/(R)/ products in China and Nepal.

     On February 27, 1999, the Company's Board of Directors approved a
Transaction Agreement (the "Transaction Agreement") between the Company and TNF
Acquisition LLC ("TNF"), an affiliate of Leonard Green & Partners, L.P. ("LGP").
The Transaction Agreement provides for a tender offer for all of the Company's
outstanding stock (other than shares held by James G. Fifield, 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,
however, the Transaction Agreement remained in full force and effect.  There can
be no assurance that the transactions contemplated by the Transaction Agreement
(the "Transactions") will be consummated at all or on terms favorable to the
Company's 

                                       10
<PAGE>
 
shareholders. If the Transaction Agreement is terminated, the Company could be
required under certain circumstances to pay TNF a $7 million termination fee
plus up to $5.5 million of TNF's expenses associated with the Transactions.

     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 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 a material adverse effect on the Company's
business and operations.

     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.

     On March 9, 1999, a purported shareholder class action complaint was filed
in federal district court in Colorado, alleging that the Company and various of
its officers and directors violated the federal securities laws by making false
and misleading statements about the Company's financial results during a class
period from April 25, 1997 through March 4, 1999.  Markus v. The North Face,
Inc., et al., Civ. A. No. 99-WM-473.  Subsequently, complaints with similar
allegations and class periods on behalf of persons trading in the Company's
securities, have been filed in federal district courts in Colorado and
California (collectively, the "Securities Litigation").  The Company believes it
has meritorious defenses to these claims and intends to contest the Securities
Litigation 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 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 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

     Subsequent to the issuance of the Company's Condensed Consolidated
Financial Statements for the three and nine months ended September 30, 1998, the
Company's management determined that certain barter transaction revenue had been
improperly recognized, the earnings process had not been completed on a sale to
a wholesale customer, certain guarantees and severance costs primarily related
to the move to Colorado had not been properly accrued, certain capitalized costs
related to information systems and consulting costs had not been expensed, and
certain property, abandoned in connection with the move to Colorado, should have
been written off during the three months ended September 30, 1998 rather than
the three months ended December 31, 1998. Additionally, the revenue associated 
with a certain wholesale distributor was reversed because sales accounting was
not consistent with certain terms of that transaction which were designed to
avoid distribution into inappropriate channels and preserve The North Face
brand. It was also determined that the Company's investment in La Sportiva
S.r.l. should have been recorded under the equity method of accounting. As a
result, the accompanying Condensed Consolidated Financial

                                      11
<PAGE>
 
Statements as of and for the three and nine months ended September 30, 1998,
have been restated from amounts previously reported. The effects of the
restatement are presented in Note 7 of Notes to the Condensed Consolidated
Financial Statements and have been reflected herein.

     In addition to the restatements reflected herein, the Company has also 
restated its previously issued Consolidated Financial Statements for the year 
ended December 31, 1997 and its previously issued Condensed Consolidated 
Financial Statements for the three and six months ended March 31, 1998 and June 
30, 1998. See the Form 10-K/A and the Company's Quarterly Reports on Form 10-Q/A
for the three and six months ended March 31, 1998 and June 30, 1998. 

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, 1997 and in other documents that may be
subsequently filed with the Securities and Exchange 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 three and nine month periods ended September
30, 1998 and 1997 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,
                                                                 ---------------------   --------------------      
                                                                    1998        1997        1998       1997
                                                                 ---------   ---------   ---------  ---------      
<S>                                                             <C>         <C>         <C>         <C>
Net sales.....................................................     100.0%      100.0%      100.0%     100.0%
Gross profit..................................................      44.0%       45.6%       43.9%      44.4%
Operating expenses............................................      26.1%       23.9%       36.2%      34.0%
Other operating expenses......................................       3.6%        0.0%        2.7%       0.0%
Operating income..............................................      14.3%       21.7%        5.0%      10.4%
Interest expense..............................................      (1.8)%      (1.0)%      (1.7)%     (0.8)%
Income before provision for income taxes......................      12.6%       20.5%        3.4%       9.5%
Provision for income taxes....................................      38.5%       39.7%       38.%5      39.7%
Net income....................................................       7.7%       12.4%        2.1%       5.7%
</TABLE>

                                      12
<PAGE>
 
Three Months Ended September 30, 1998 Compared to Three Months Ended September
  30, 1997

Net Sales.  Net sales increased by 7.6% to $93.6 million from $87.0 million for
the three months ended September 30, 1998 (the "Third Quarter 1998") over the
three months ended September 30, 1997 (the "Third Quarter 1997").

     Net sales to wholesale customers including international sales increased by
3.2% to $80.6 million from $78.1 million for the Third Quarter 1998 compared to
the Third Quarter 1997.  This increase was primarily a result of continued
strong sales of existing products, offset by the reversal of a $9.3 million sale
to a distributor as well as the timing of shipments of Fall preseason sales.

     Retail sales in the U.S. and Canada increased by 46.3% to $13.0 million
from $8.9 million for the Third Quarter 1998 compared to the Third Quarter 1997.
These increases are due primarily to three new outlet stores opening during the
Third Quarter 1998.  On a comparable store basis, retail sales increased by
20.6% (approximately 13% for retail stores and 35% for outlets).  These
increases are primarily the result of a successful sale held at the retail
stores in August and at the outlets in September, a better merchandising mix of
inventory at both the outlets and retail stores, and a more volume-oriented
pricing strategy at the outlets.

Gross Profit.  Gross profit as a percentage of net sales for the Third Quarter
1998 was 44.0% or $41.2 million, compared to 45.6% or $39.7 million for the
Third Quarter 1997. The decrease in gross margin was primarily attributable to
lower revenue and earnings from the Asian market as well as guarantees related
to a certain barter transaction.

Operating Expenses.  Operating expenses, which include selling, marketing, and
general administrative expenses, excluding other operating expenses, increased
by 17.6% to $24.5 million from $20.8 million for the Third Quarter 1998 compared
to the Third Quarter 1997. The increase of $3.7 million is primarily due to
increases in variable and fixed costs to support the growth of the Company's
business. Operating expenses, excluding other operating expenses, as a
percentage of net sales increased from 23.9% to 26.1%, reflecting the relatively
low level of revenue growth.

Other Operating Expenses.  During the Third Quarter 1998, the Company recorded
relocation and other operating expenses of $3.4 million related to relocating a
portion of its corporate headquarters to Carbondale, Colorado, the realignment
of its San Leandro, California facility, and establishing a Hong Kong operation
to facilitate its sourcing of products in Asia.

Interest Expense.  Interest expense increased to $1.6 million from $.9 million
for the Third Quarter 1998 compared to the Third Quarter 1997.  This increase is
primarily a result of the Company's higher average borrowings in 1998 versus 
1997.

Provision for Income Taxes.  Income taxes as a percentage of pretax income was
approximately 38.5% for the Third Quarter 1998 compared to 39.5% for the Third
Quarter 1997.   This decrease in the effective tax rate reflects the application
of tax credits for research and development activities as well as the mix of the
Company's pretax earnings between domestic and international operations which
are subject to different tax rates.

Nine Months Ended September 30, 1998 Compared to Nine Months Ended September 30,
  1997

Net Sales.  Net sales increased by 15.9% to $182.5 million from $157.4 million
for the nine months ended September 30, 1998 (the "First Nine Months 1998")
compared to the nine months ended September 30, 1997 (the "First Nine Months
1997").

     Net sales to wholesale customers including international sales
increased by 14.8% to $155.0 million from $135.0 million for the First Nine
Months 1998 compared to the First Nine Months 1997.  This increase was primarily
a result of increased unit sales to the Company's existing wholesale 

                                      13
<PAGE>
 
customers resulting from continued strong sales of existing products and
increased sales through the Summit Shop program.

     Retail sales in the U.S. and Canada increased by 22.6% to $27.5 million
from $22.4 million for the First Nine Months 1998 compared to First Nine Months
1997.  This increase is due primarily to three new outlet stores opening during
the Third Quarter 1998 and increases in comparative store sales.  On a
comparable store basis, retail sales increased by 9.5% (approximately 5.7% for
retail stores and 16.3% for outlets).  This increase is due to a successful sale
held at the retail stores in August, 1998 and at the outlets in May and
September, 1998, a better merchandising mix of inventory at both the outlets and
retail stores, and a more volume-oriented pricing strategy at the outlets.

Gross Profit. Gross profit as a percentage of net sales for the First Nine
Months 1998 was 43.9% or $80.1 million compared to 44.4% or $69.9 million for
the First Nine Months 1997. The decline in gross margin is primarily due to
lower revenue and earnings from the Asian market as well as certain guarantees
related to barter transactions.

Operating Expenses.  Operating expenses, which include selling, marketing, and
general and administrative expenses, excluding other operating expenses,
increased by 23.3% to $66.0 million from $53.6 million for the First Nine Months
1998 compared to the First Nine Months 1997.  The increase is primarily due to
increases in variable and fixed costs to support the growth of the Company's
business.

Other Operating Expenses.  During the First Nine Months 1998, the Company
recorded expenses of $3.4 million related to relocating a portion of its
corporate headquarters to Carbondale, Colorado, the realignment of its San
Leandro, California facility and establishing a Hong Kong operation to
facilitate its sourcing of products in Asia.  In addition, during the First Nine
Months 1998, the Company recorded a charge of $1.5 million related to the
closing of an out-dated manufacturing facility in Scotland, the integration of
its Canadian subsidiary into a combined North American business operation, and
the termination of its German sales agent.

Interest Expense.  Interest expense increased to $3.2 million from $1.3 million
for the First Nine Months 1998 compared to the First Nine Months 1997.  This
increase is primarily a result of the Company using the proceeds from its two
public offerings in 1996 to repay debt, which allowed the Company to maintain a
lower average level of debt in early 1997.  In 1998, the Company carried higher
levels of debt to accommodate growth in net working capital.

Provision for Income Taxes.  Income taxes as a percent of pretax income was
approximately 38.5% for the First Nine Months 1998 compared to 39.5% for the
First Nine Months 1997. This decrease in the effective tax rate reflects the
application of tax credits for research and development activities as well as
the mix of the Company's pretax earnings amongst domestic and international
operations which are subject to different tax rates.

Seasonality

     The Company's business is subject to seasonal and quarterly fluctuations.
Historically, the Company has realized substantially all of its profits in the
third quarter and has recognized losses during the first and second quarter,
with the exception of the first quarter of 1997.  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, advertising
and marketing expenditures, increases in the number of employees and overhead to
support growth and store opening costs.

     The Company anticipates that it will continue to incur net losses during
the first and second calendar quarter for the foreseeable future.  Additionally,
the Company's effective tax rate can vary 

                                      14
<PAGE>
 
significantly from quarter to quarter due to the relative mix of earnings from
the Company's domestic and international operations, which are taxed at
different rates.

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 our
information 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 systems by November
1999.  No significant Year 2000 problems have been identified in the Company's
non-IT systems.

     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 $366,000 has been incurred through December 31,
1998.

     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 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 the end of the third quarter of 1999.

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, insider selling of Common Stock and
speculation in the trade or business press. The trading price may also be
affected by retail industry, stock market, or economic factors unrelated to the
Company's operating performance.  Future sales of 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.

     Trading in the Company's Common Stock was halted on April 16, 1999. There 
can be no assurance that the trading price of the Company's Common Stock will 
not fluctuate significantly upon the resumption of trading in its Common Stock 
or that there will not be any other adverse effect on the Company's business or 
operations as a result of the trading halt.

LIQUIDITY AND CAPITAL RESOURCES

     In September 1998, the Company entered into a new five year Global Senior
Secured Revolving Credit Facility (the "New Credit Facility") with The 
Industrial Bank of Japan, Limited, New York Branch (as syndication agent and
documentation agent), and IBJ Whitehall Business Credit Corporation (as
arrangers, collateral agent and as administrative agent for itself and the other
lenders), and other financial institutions (the "Financial Institutions"). The
New Credit Facility

                                      15
<PAGE>
 
includes a term note, a revolving line of credit and a letter of credit
facility. The term note (availability up to $15,000,000) is payable in equal
quarterly installments based on five year amortization of the outstanding term
loan from the last day of the term loan availability period with payments
commencing on October 1, 1999, but the outstanding principal balance shall be
due and payable in full on the termination date which is September 2003. The
term note carries interest payable monthly at the higher of (a) the bank's base
commercial lending rate minus one-half of one percent (.50%) and (b) one-half of
one percent (.50%) above the federal funds effective rate plus the applicable
margin. The Company had an outstanding $5,000,000 term note as of December 31,
1998, with the interest rate of 7.25%. The revolving line of credit provides for
borrowing up to $115 million with the actual borrowings limited to available
collateral, representing eligible receivables and inventory (approximately $91.9
million of gross availability as of December 31, 1998, of which the Company
borrowed $55.1 million at December 31, 1998). Interest on the revolving line of
credit is payable monthly at a rate of either (1) the prime rate which is the
higher of (a) the bank's base commercial lending rate minus .50% and (b) .50%
above the federal funds effective rate plus the applicable margin, or (2) LIBOR
plus the applicable margin, at the option of the Company. The average interest
rate was 7.15% at December 31, 1998. The revolving line of credit agreement
provides a sublimit facility for letters of credit up to a maximum of $40
million (approximately $10.5 million outstanding as of December 31, 1998). Fees
for outstanding letters of credit are payable quarterly at 1.5% per annum. The
Company also pays a monthly unused line fee on the revolver at .375% per annum.
Borrowings and outstanding letters of credit under the New Credit Facility are
secured by substantially all of the assets of the Company. The New Credit
Facility includes certain financial covenants and restrictions on new
indebtedness and the payment of cash dividends. On May 3, 1999, the Company
received a written waiver from the Financial Institutions for violations of
certain of the Company's non-financial covenants as set forth in the agreements
relating to the New Credit Facility.

     During the nine months ended September 30, 1998, the primary uses of cash
were to purchase merchandise inventories, finance growth of the Company's
accounts receivable, upgrade the Company's data processing systems, expand the
U.S. corporate headquarters, and finance openings of summit shops and new outlet
stores.

     In May 1998, the Company received $14.0 million resulting from the sale and
issuance of 665,060 shares of the Company's Common Stock to the Company's
President and Chief Executive Officer.

     The Company's capital expenditures in 1998 were approximately $17.2
million.  This amount was used for investment in Summit Shops, the upgrade of
management information systems, the expansion of the Company's administration
and distribution facilities, the establishment of operating facilities in
Colorado and manufacturing facilities in Hong Kong, the expansion of its
European sales and marketing operations, the remodeling of existing retail
stores, and the opening of new outlet stores.

     The Company anticipates that cash available under the Company's credit
facilities will be sufficient to satisfy its cash requirements for at least the
next 12 months.

                                      16
<PAGE>
 
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.

     On March 9, 1999, a purported shareholder class action complaint was filed
in federal district court in Colorado, alleging that the Company and various of
its officers and directors violated the federal securities laws by making false
and misleading statements about the Company's financial results during a class
period from April 25, 1997 through March 4, 1999.  Markus v. The North Face,
Inc., et al., Civ. A. No. 99-WM-473.  Subsequently, complaints with similar
allegations and class periods on behalf of persons trading in the Company's
securities, have been filed in federal district courts in Colorado and
California (collectively, the "Securities Litigation").  The Company believes it
has meritorious defenses to these claims and intends to contest the Securities
Litigation 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 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.

                                      17
<PAGE>
 
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)     Exhibits

10.1/(1)/  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.

10.2/(1)/  Amendment agreement, dated as of September 11, 1998 to the Loan
           Agreement.

27.1       Financial Data Schedule


/(1)/   Incorporated by reference to Company's report on Form 10-Q for the
        period ending September 30, 1998, filed with the Securities and Exchange
        Commission on November 13, 1998.

(b)     Reports on Form 8-K

        Form 8-K, dated June 30, 1998, was filed on July 7, 1998 disclosing
        recent acquisitions, the plan to relocate a portion of the Company's
        executive offices and realign other operations of the Company, the plan
        to establish a facility in Hong Kong to manage the Company's
        relationship with certain third party manufacturers, and the adoption of
        a Stockholder Rights Plan. 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.

        Form 8-K/A, dated July 20, 1998, was filed on July 21, 1998 amending the
        Form 8-K of the Company filed on July 7, 1998 by including a Form of
        Letter to Stockholders with respect to the adoption of the Stockholders'
        Rights Plan in the Exhibits thereto.

                                      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:                         By:  /s/ James G. Fifield
                                         ---------------------------------
           May 7, 1999                   James G. Fifield
                                         President and Chief Executive Officer


     Dated:                         By:  /s/  Jeffrey C. Mack
                                         ---------------------------------
           May 7, 1999                   Jeffrey C. Mack
                                         Acting Chief Financial Officer
                                         (Principal Financial and Accounting
                                         Officer of the Registrant)

                                      19
<PAGE>
 
INDEX OF EXHIBITS

10.1/(1)/  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.

10.2/(1)/  Amendment agreement, dated as of September 11, 1998 to the Loan
           Agreement.

27.1       Financial Data Schedule


/(1)/ Incorporated by reference to Company's report on Form 10-Q for the period
      ending September 30, 1998, filed with the Securities and Exchange
      Commission on November 13, 1998.

                                      20