The Timberland Company was incorporated in Delaware on December 20, 1978. We are the successor to the Abington Shoe Company, which was incorporated in Massachusetts in 1933. We refer to The Timberland Company, together with its subsidiaries, as “we”, “our”, “us”, “its”, “Timberland” or the “Company.”
We design, develop and market premium quality footwear, apparel and accessories products for men, women and children under the Timberland®, Timberland PRO®, Timberland Boot Company®, SmartWool®, howies® and IPATH® brands. We sell our products to retail accounts through our wholesale channel, through Timberland-owned retail including stores and Internet sales, and through a mix of independent distributors, franchisees and licensees worldwide.
Our principal strategic goal is to become the authentic outdoor brand of choice globally by offering an integrated product selection that equips consumers to enjoy the experience of being in the outdoors. Our ongoing efforts to achieve this goal include (i) enhancing our leadership position in our core Timberland® footwear business through an increased focus on technological innovation and “big idea” initiatives like Earthkeeperstm, (ii) expanding our global apparel and accessories business by leveraging the brand’s equity and initiatives through a combination of in-house development and licensing arrangements with trusted partners, (iii) expanding our brands geographically, (iv) driving operational and financial excellence, (v) setting the standard for social and environmental responsibility and (vi) striving to be an employer of choice.
Our products fall into two primary categories: (1) footwear and (2) apparel and accessories. We also derive royalty revenue from third party licensees and distributors that produce and/or sell our products under license
In 1973, we produced our first pair of waterproof leather boots under the Timberland® brand. We now offer a broad variety of footwear products for men, women and children, featuring premium materials and state-of-the-art design and construction. Our Timberland® men’s footwear products harness the power of the outdoors, emphasizing durability, comfort, rugged performance and craftsmanship. Our Timberland® women’s footwear line is rooted in creating stylish outdoor products that combine beautiful styling, performance and eco-conscious materials. Our Timberland® kids’ footwear products are designed and engineered specifically for kids with the same high-quality standards and materials as our adult footwear products, combining the rugged heritage of premium leathers and craftsmanship with a primary focus on fit, functionality and convenience.
Our key boots line includes the 6” basic, premium and chukka boots, including roll-tops. Another important line is our sport boots, which include our Field Boot, Euro Hiker, and Euro Sprint Hiker. Some of the principal features of our classic boot products include premium waterproof leather, direct-attach and seam-sealed waterproof construction, rubber lug outsoles for superior traction and abrasion resistance, shock diffusion plates, durable laces, padded collars for comfortable fit, enhanced insulation, rustproof hardware for durability and moisture-wicking components for comfort and breathability.
Our Timberland® casual footwear series is rooted in craftsmanship and innovation, which results in products made from superior materials and characterized by enhanced comfort. Featured footwear products include authentic rugged handsewn oxfords, boat shoes and casual bucks for commuting, at home or the outdoors. Our Timberland Boot Company® and Abington collections are premium-priced “elite” collections within our casual footwear category which we distribute via very selective “boutique” channels in major markets.
Our Timberland® Outdoor Performance footwear continues to address the needs of outdoor recreationalists and enthusiasts of all levels, offering technical, end-use driven products for outdoor adventures from summit to sea and everywhere in between.
Timberland PRO® Series
The Timberland PRO® series targets working professionals whose jobs demand footwear that stands up to the harshest working conditions. Timberland PRO continues to expand from Industrial to Occupational, complementing the offering of safety boots for tradesmen to include products for other consumers who have workplace footwear requirements. New product lines include the Renovatm series, a line of footwear designed for those employed in the healthcare industry that addresses the need for comfort during extended wear.
IPATH designs, develops and markets skateboarding-inspired casual footwear, apparel and accessories. The IPATH® brand mantra is “Follow Your Path” and represents a confluence of youth lifestyles, drawing strong influence from music, art and culture. IPATH bridges the gap between skate and lifestyle, offering consumers product with performance features and the styling to meet their needs. Natural materials are used in many of the styles, affording the brand a unique position in the market. Distribution for IPATH is worldwide, and focuses on core skate and surf shops, online retailers, and national youth fashion chains. IPATH continues to have success with classic styles, including the Cat and the Grasshopper that have been in existence since the company’s inception, and infuses new trend-right styling into the line each season.
Apparel and Accessories
Timberland® and Timberland PRO® Series
Timberland’s apparel for men, women and kids continues to offer outdoor adventure and outdoor leisure products that combine performance benefits and versatile styling. We believe that continuing to develop and expand our apparel business is important to our global brand aspirations, and that experienced licensing partners will help us maximize our brand potential in apparel.
SmartWool extends our enterprise’s reach by offering apparel and accessories to the active outdoor consumer. SmartWool is a leading provider of premium performance merino wool-based socks, apparel and accessories for men, women and children. SmartWool’s key product categories are performance socks, lifestyle socks and Next-to-Skin Baselayers. SmartWool® performance socks range from core basic outdoor styles to the premium, technical, industry-leading PhD® line that includes Outdoor, Run, Cycle and Ski for the outdoor and snow-sports consumer.
howies Limited is an active sports apparel brand founded on the idea of designing and manufacturing clothing for the socially engaged and environmentally conscious action sports and outdoor consumer. howies uses high quality materials and pursues lower impact building processes and sourcing strategies, all of which help howies make innovative product while minimizing its impact on the environment. We sell howies® products through seasonal catalogs, howies-owned retail, including stores and the Internet, and through a mix of independent retailers. howies’ main office is located in Cardigan Bay, Wales, U.K.
Third-party licensing enables us to expand our brand reach to appropriate and well-defined categories and to benefit from the expertise of the licensees in a manner that reduces the risks to us associated with pursuing these opportunities. We receive a royalty on sales of our licensed products. We continue to focus on closely aligning our licensed products and distribution to our strategic brand initiatives and long range strategies and to build better integration across these products to present a seamless brand worldwide. Our licensed Timberland® products for men, women and children include apparel and accessories. We license rights to children’s apparel worldwide, men’s apparel in North America, and women’s apparel in Europe. The accessories products include packs and travel gear, women’s handbags, belts, wallets, socks, headwear, gloves, watches, sunglasses, eyewear and ophthalmic frames and various other small leather goods, and are designed, manufactured and distributed pursuant to licensing agreements with third parties. We also offer Timberland PRO® footwear and apparel in Europe under a license agreement.
In 2009, our revenue was higher in the last two quarters of the year than in the first two quarters, which is consistent with our historical experience. Accordingly, the amount of fixed costs related to our operations represented a larger percentage of revenue in the first two quarters of 2009 than in the last two quarters of 2009. We expect this seasonality to continue in 2010.
We had approximately 5,700 full and part-time employees worldwide at December 31, 2009. Our management considers our employee relations to be good. None of our employees are represented by a labor union, and we have never suffered a material interruption of business caused by labor disputes involving our own employees.