The millionaire creator of outdoor clothing firm Patagonia has donated his company to a nonprofit trust.
Yvon Chouinard said that all profits not spent in the firm will be used to combat climate change.
The company has a cult following as a result of sustainability initiatives such as guaranteeing its clothing for life and giving fair, less costly repair prices.
It is notable for its advertisement titled “Don’t buy this jacket,” which asks buyers to consider the environmental consequences.
According to the brand’s website, “Earth is now our only stakeholder.”
Mr. Chouinard has always said that he “never aspired to be a businessman.”
He began by fabricating metal climbing spikes for himself and his pals to wedge into rocks, before moving on to clothes and finally developing a tremendously successful sportswear company with a cult following.
Patagonia, which was founded in 1973, had sales of roughly $1.5 billion this year, while Mr Chouinard’s net wealth is estimated to be $1.2 billion.
But he has consistently downplayed his fortune, telling the New York Times that he is “horrified to be viewed as a millionaire.”
He estimated that revenues to be contributed to climate concerns would total roughly $100 million each year, depending on the company’s health.
“Despite its vastness, the Earth’s resources are limited, and it’s evident that we’ve reached their limitations,” the entrepreneur said of his decision to relinquish control.
The firm’s marketing strategies, which have centered on advising consumers to purchase just what they need, have not impacted sales, and opponents contend that by increasing its visibility, it has promoted more spending rather than less.
Prices are quite pricey, with jumpers costing approximately £200 and T-shirts costing roughly £40, but the firm claims that the price reflects the fact that its items are designed to last a lifetime.
Patagonia’s chairman, Charles Conn, accepted the increased costs but said that low-cost quick fashion was “anathema” to the company.
“We invest in making sure we utilize the least amount of water, the least amount of harmful chemicals and dies, and the least amount of carbon in the creation of our goods,” he told the BBC.
Sandra Halliday, UK editor for FashionNetwork.com, a worldwide fashion news website, told the BBC that Mr Chouinard’s approach might actually increase sales.
She did, however, say that the “maverick” founder was always more concerned with the environment than “just generating money.”
“If this were just a marketing trick, it would be brilliant, but it’s not; it’s a sincere effort to do something better for the earth.”
The California-based company was already contributing 1% of its yearly revenues to grassroots activists and was devoted to environmentally friendly practices. However, in an open letter to clients, the somewhat hesitant businessman stated his desire to do more.
Mr Chouinard said that he had pondered selling Patagonia and giving the proceeds to charity, as well as taking the firm public. However, he said that both possibilities would have meant relinquishing control of the company and jeopardizing its ideals.
Instead, the Chouinard family has transferred complete control to two new companies. The family-led Patagonia Purpose Trust will continue to be the company’s majority shareholder, but will possess just 2% of its total capital, according to Mr Chouinard.
It will direct the generosity of the Holdfast Collective, a US charity “committed to combating the environmental problem” that presently controls all of the non-voting shares – or almost 98% of the firm.
“Every year, after reinvesting in the firm, the money we produce will be paid as a dividend to assist battle the crisis,” Mr Chouinard added.
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