Patagonia: why has founder Yvon Chouinard given away the company - who is the new owner?
Yvon Chouinard, Patagonia founder, has said that instead of ‘going public’ the company is ‘going purpose’
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Patagonia founder Yvon Chouinard has given the company away in a bid to tackle the ongoing environmental crisis.
Chouinard, who said in a statement that he “never wanted to be a businessman”, started out as a rock climbing enthusiast who made climbing gear for himself and his friends before then getting into apparel.
This is everything you need to know.
Why has Yvon Chouinard given away Patagonia?
In a statement shared on the Patagonia website, owner Chouinard shared that he has given away the company to a charitable trust in order to fight against climate change.
He wrote that when Patagonia began, the company did what it could to help the environment, including using materials that caused less harm and giving away 1% of sales each year to grassroots environmental activists.
“In 2018, we changed the company’s purpose to: We’re in business to save our home planet,” Chouinard said.
“While we’re doing our best to address the environmental crisis, it’s not enough. We needed to find a way to put more money into fighting the crisis while keeping the company’s values intact.”
Chouinard continued: “One option was to sell Patagonia and donate all the money. But we couldn’t be sure a new owner would maintain our values or keep our team of people around the world employed.
“Another path was to take the company public. What a disaster that would have been.
“Even public companies with good intentions are under too much pressure to create short-term gain at the expense of long-term vitality and responsibility.
“Truth be told, there were no good options available. So, we created our own.”
Chouinard announced that “instead of “going public”, you could say we’re “going purpose””, transferring the company’s voting stock to the Patagonia Purpose Trust and nonvoting stock to the Holdfast Collective, a nonprofit designed to fight the environmental crisis.
He ended the statement by saying: “If we have any hope of a thriving planet—much less a thriving business—50 years from now, it is going to take all of us doing what we can with the resources we have. This is another way we’ve found to do our part.
“Despite its immensity, the Earth’s resources are not infinite, and it’s clear we’ve exceeded its limits. But it’s also resilient.
“We can save our planet if we commit to it.”
Who owns Patagonia now?
Patagonia is now owned by the Holdfast Collective and the Patagonia Purpose Trust, with the former owning 98% of the company and all nonvoting stock, and the latter the remaining 2% and all voting stock.
According to the Patagonia website, “nonvoting stock carries economic value but not decision making authority” whereas “voting stock has both economic value and decision making authority”.
The Holdfast Collective is a not-for-profit organisation that will reportedly use “every dollar received to fight the environmental crisis, protect nature and biodiversity, and support thriving communities, as quickly as possible”.
Funding for the Holdfast Collective will come from Patagonia, with excess profits each year to be distributed as a dividend to the Holdfast Collective to be used for its work.
The Patagonia Purpose Trust was created in order to protect Patagonia’s values and missions and, because it owns all the voting stock in the company, it has the right to approve key company decisions, such as who sits on the board of directors and what changes can be made to the company’s legal charter.
The Patagonia website explains: “Put another way, Patagonia’s purpose is: We’re in business to save our home planet. The Patagonia Purpose Trust ensures the company’s commitment to its purpose forever.”
Patagonia will continue to be run by CEO Ryan Gellert with Patagonia’s employees under the direction of the board of directors.