Axios Pro Exclusive Content

Patagonia's new shareholder is the Earth

Richard Collings
Sep 15, 2022
A small store advertising Patagonia, spelled out in white letters, hangs from the side of a building.
Robert Alexander/Getty Image

Patagonia's founder Yvon Chouinard announced plans to transfer ownership of the outdoor clothing retailer to the Patagonia Purpose Trust and the Holdfast Collective.

Why it's the BFD: It doesn't happen often, but Patagonia joins other companies controlled by mission-driven shareholders such as the Hershey Company, which is majority owned by the Hershey Trust Company, and REI Co-op.

  • Patagonia's valuation was pegged at $3 billion, according to the New York Times — representing a premium over competitors like Lands' End and VF Corp., though still in range of those companies.

Details: After nixing a sale or public offering, Patagonia decided to stay private, remain a B Corp, and transfer ownership to a trust and nonprofit.

  • Profits will go toward curtailing climate change, to the tune of a $100 million dividend per year.

The intrigue: "We needed to find a way to put more money into fighting the crisis while keeping the company’s values intact," Chouinard wrote in a letter posted on Patagonia's website.

  • "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," he said.
  • The company also eschewed going public, citing "too much pressure to create short-term gain at the expense of long-term vitality and responsibility," Chouinard said.

Of note: Clif Bar faced the same dilemma, with founder Gary Erickson backing out of a deal to sell the business in 2000 for $120 million to Quaker Oats and to instead focus on sustainability.

  • Erickson seemed intent on keeping the company independent and private, but it ended up being sold to Mondelez for $2.9 billion earlier this summer.

The bottom line: “We’re making Earth our only shareholder. I am dead serious about saving this planet," Chouinard said in a statement.

Go deeper