The business model of Patagonia.
Patagonia, the outdoor fashion brand, wears its commitment to environmental sustainability almost literally on its sleeve: the company has been a pioneer in sustainable clothing. Their circular, impact-driven business model prioritizes product lifecycle, recycling, and durability. As one of the first in the fashion industry, they understood the need to adapt to climate change and not only made sustainability their mission but managed to turn it into a trend. Read on to find out how Patagonia has set aside the traditional silo mindset and became a force for good for people and planet.
From DIY to Do-It-for-Good.
It all started in the 70s, when all Yvon Chouinard, a climbing fanatic, could think about was reaching the world’s highest mountain peaks. Back then, climbing was no cheap hobby. To save money on the climb and improve his ascent, Yvon started manufacturing and selling his own climbing gear. His first breakthrough: steel anchors that climbers use to fix to the rock. These jump-started his business and presence in the American climbing community, quickly capturing around 40% of the climbing market.
Despite this overwhelming success, things were not all rosy. The steel anchors used existing slits in the mountain wall, widening it over time, causing permanent damage to it. Yvon was not comfortable with this. The alternative, however, in the shape of aluminum hooks, was too costly to produce and therefore presented a scaling challenge. If Yvon wanted to make a positive impact on the world and the environment and if he wanted to turn business into a force for good, something had to change. Yvon shifted the focus of the business from climbing gear to sustainable outdoor clothing.
“We (Patagonia) are in business to save our home planet.”
Yvon Chouinard.
The bold move towards lifetime fashion at Patagonia.
At that time, with competitors focusing on reducing production costs all while increasing volume, designing and selling clothing that in the first place would last a lifetime was unthinkable. The common, unsustainable business model had many negative effects: an enormous amount of waste, the exhaustion of resources and the exploitation of workers. Yvon decided to do things differently and committed to designing a clothing line that would do less harm to the environment. Patagonia was born; a sustainable outdoor clothing brand committed to reducing its environmental and social footprint. Yvon Chouinard believes that businesses, without exception, have a corporate responsibility to protect the planet. And with Patagonia he is leading by example by increasing the lifespan of products, giving back to the planet, and sourcing and manufacturing responsibly.
Reduce-Reuse-Repair.
Patagonia is all about designing, testing, and selling sustainable clothing and leaves the heavy production lifting to third parties. The company is walking the green walk! By teaming up with Fair Trade Certified companies, ensuring fair wages, and creating safe working conditions, it is planting its flag on the peak of Mount Sustainability.
And that’s not all. In the magical realm of the Reduce-Reuse-Repair triangle, Patagonia throws in one more treat for its customers, Worn Wear a lifetime repair guarantee. Yes, that’s right, they have got your back — and your zipper, and that little tear in your favorite adventure jacket! So, when you put on a Patagonia garment, you’re not just wearing clothes; you’re joining a movement. It’s a blend of style, sustainability, and a commitment to the planet that feels as refreshing as a breeze off the Andes. Patagonia’s clothes are fashionable, time-traveling eco-superheroes.
Worn Wear is the fairy godparent of your wardrobe dreams. This magical program is all about repairs reuse, and making your clothes feel like new again, so you can love them for a lifetime. Even when you no longer have use for that fleece jacket or those pants, you can offer them new life on Patagonia’s own second-hand market. Say goodbye to fast fashion flings and hello to a committed, long-term relationship with your clothes.
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Earth, you can have Patagonia.
In 2022, Yvon Chouinard took things up a notch. He said, “Earth, you can have the company” and declared earth Patagonia’s one and only shareholder. How?
By handing over 100% of voting stock to the Patagonia Purpose Trust, set up to guard the company values. The nonvoting stock was donated to the Holdfast Collective, founded to help battling the environmental crisis. It’s like stocks on a mission: keeping short-term focused investors at arm’s length and investing in a much greener and happier planet.
Now, here’s the real plot twist: by doing so, Patagonia is responsible for donating around $100 million annually to fight climate change. It’s not just about looking good; it’s just as much about doing good.
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Style, success, and saving the planet.
Patagonia isn’t just giving back; it’s throwing a full-blown party for the planet by offering grants, supporting non-profits, and hosting a website that connects you with eco-warriors. Patagonia has become a matchmaker for environmental activism in the form of informative documentaries, legal battles, and even boycotts.
Patagonia is an environmental superhero to its core. In a world of fast fashion, they are the only option for sustainable, outdoor style. Patagonia has managed to turn a fashion label into a force for good, proving that you can look cool, be successful, and save the planet-all at the same time.
Noteworthy wards.
Patagonia’s efforts and achievements have not gone unnoticed. Over the years they received a more than fair share of awards, proving that being an eco-superhero does come with well-deserved accolades.
- In 2022 Patagonia was awarded the 2022 Fabric of Life Award for nearly 50 years of “breaking barriers” on the level of both products and responsibility.
- In 2019, Patagonia was named UN Champion of the Earth, receiving the UN’s top environmental honour for its commitment to sustainability and advocacy for the protection of the environment
- In 2022, Patagonia founder Yvon Chouinard was honoured with the Outstanding Achievement Award at The Fashion Awards, presented by Diet Coke
3 takeaways from the Patagonia business model:
- Business for good: Commit to solving environmental challenges by involving and supporting other like-minded people and organizations to create a multiplier effect.
- Design to pass the test of time: Design products to last a lifetime by looking at ways to reduce, reuse, and recycle.
- Challenge the status quo: You can always do more — in the business itself, in the way you leverage its capital for doing good, and by addressing other big problems (moving into the food sector with their activist mindset and approach to business).
Do you want to make a dent in the universe? Unleash your potential with our Impact Playbook. Download it now and be that impact.
Are you looking to make a positive impact? Meet Leroy
He is not afraid to make a few dents.
Originally published at https://www.businessmodelsinc.com.
