What’s happening to Patagonia?
The multibillion dollar company is now in the hands of an environmental trust which plans to use absolutely all the money it makes forever to fight climate change.
Back up a second, what is Patagonia again?
It is a clothes company, but a very specialist clothes company, which sells all manner of outdoorsy stuff including fleeces, thermals, hats, jackets, and the expensive gear you’ll need if you want to go skiing.
So, who is behind this move?
Its owner, the 83-year-old Yvon Chouinard, his wife and their adult children.
And who is Yvon Chouinard?
Perhaps one of the most interesting men in the world of business. He started out as a rock climber in the 1960s and lived for the mountains he scaled. He had little regard for anything else including food or comfort. For a time, he lived out of his car and fuelled himself with cheap cat food.
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That sounds both disgusting and eccentric, and seems like an unusual start for a billionaire
Don’t call him a billionaire for starters, he doesn’t like it, but we will come back to that. In 1973, he turned his passion for the outdoor life into a business and set up a company selling outdoor clothes. He put his principles front and centre of the company, something which was considered out of step with corporate America, to put it mildly.
Tell me more
He sought out ethically produced materials and made Patagonia one of the first companies to use organic cotton. He treated his staff well and was unusually straight with consumers. For years Patagonia has given 1 per cent of its sales to environmental charities.
But he’s just a typical rich white man underneath it all, right?
He most certainly is not. He really doesn’t care a jot for the trappings of wealth. We know this because he wears much the same clothes he might have done when living on the mountainsides of California and lunch was cat food. He drives a beat-up old car and, according to the New York Times, his home is modest. He doesn’t own a phone or a computer and he has made it clear he hates being called a billionaire.
What do you mean hates it?
Well, this week, in a big interview with the New York Times outlining the plans for Patagonia, he said his listing in Forbes magazine as a billionaire “really, really pissed me off. I don’t have $1 billion in the bank. I don’t drive Lexuses.”
Back to the trust. How will it work?
Chouinard, his wife and two adult children have transferred the $3 billion company into a trust and non-profit organisation to secure the company’s independence and funnel the $100 million annual profits into the fight against climate change.
But the family will be able to get the money back?
Nope. All their stock has been irrevocably transferred into the charities.
What are the Chouinards playing at?
Apart from fighting climate change, they want to influence “a new form of capitalism that doesn’t end up with a few rich people and a bunch of poor people. We are going to give away the maximum amount of money to people who are actively working on saving this planet.”
But why not just float Patagonia and give some money to environmental groups like a normal billionaire?
“I don’t respect the stock market at all,” Chouinard said. “Once you’re public, you’ve lost control over the company, and you have to maximise profits for the shareholder, and then you become one of these irresponsible companies.”
But loads of billionaires give away money, right?
Hmm. Most give away only small amounts of their net worth each year and, given the nature of the capitalist world, they tend to make more money than they give away and so will forever remain absurdly wealthy.
