Could Patagonia ownership help save the planet and its retail business?

September 19, 2022

Patagonia founder Yvon Chouinard announced last week that he would abandon his company to fight climate change.

gentlemen. The 83-year-old founder said in a letter titled “Earth is now our only shareholder” that Chouinard and his family transferred ownership of the private company, reportedly worth about $3 billion, to A trust and not-for-profit organization.

Overseen by family members and close advisors, the trust owns 2% of Patagonia’s stock, but all voting shares, and will be responsible for protecting Patagonia’s existing values ​​and independence. Patagonia expects to generate and donate approximately $100 million annually, depending on the health of the business.

gentlemen. Choiunard wrote “Reimagining Capitalism” and said: “While we are doing our best to address the environmental crisis, it is not enough. We need to find a way to invest more in the crisis while keeping company values ​​the same. One option is to sell Patagonia and donate all the money. But we can’t be sure that the new owner will keep our values ​​or keep our workforce around the world working.

“The other way is to take the company public. What a disaster that would be. Even well-intentioned public companies are under enormous pressure to create short-term gains at the expense of long-term vitality and responsibility.

“To be honest, there are no good options. So, we created our own.”

The 49-year-old brand will continue to be for-profit and will continue to be led by CEO Ryan Gellert.

Still, the tactic helped the Chouinard family avoid taxes. Bloomberg “The structure of the deal has other benefits for the billionaire, allowing him and his family to maintain control of Patagonia while protecting them from potentially hundreds of millions of dollars,” it wrote. The impact of the tax bill.”

Older Chouinards could also lose momentum without a profit distribution.Ted Clark, executive director of the Center for Family Business at Northeastern University, told New York Times“If you take all the financial incentives away, the family basically has no more interest in it than a desire for the good old days.”

Discussion question: Is there a better option for Yvon Chouinard? Transfer Patagonia ownership to nonprofit to fight climate crisis? Do you think this move could have a negative impact on the business?

think tank

“Ultimately, it’s Yvon Chouinard’s company and he can decide how they go forward. I appreciate the intent.”


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