Patagonia Clothing: Making a Profit and Meeting Environmental Challenges

The popularity of Patagonia clothing demonstrates that quality green products and a business model focused on environmental sustainability are compatible with business success.

| December 2009/January 2010

Established in 1972, Patagonia is an outdoor-clothing company known for its green business model. Under the leadership of its founder and resident philosopher, Yvon Chouinard, Patagonia has grown from humble beginnings to a $330 million enterprise. Although sales of Patagonia clothing are robust, Chouinard says, Patagonia exists not only to make money but to, “prove that it’s possible to do the right thing for the planet and still make a profit. After all,” Chouinard is fond of quoting environmental leader David Bower, “there is no business to be done on a dead planet.”

Chouinard’s introduction to business began in the 1950s. Annoyed by the soft iron pitons (metal spikes through which rope can be secured) used in rock climbing, he went to a junkyard, bought an old forge, anvil, tongs and hammers and taught himself to blacksmith. It wasn’t long before he was making and selling hard steel pitons from the back of his car for $1.50 apiece. In 1965, he formed Chouinard Equipment with aeronautical engineer and fellow climber Tom Frost. Together, they redesigned and improved almost every piece of climbing equipment, and in the process built Chouinard Equipment into the largest supplier of climbing hardware in the United States.

By 1970, however, Chouinard Equipment was facing a providential dilemma. The hard steel pitons that had become the company’s trademark were damaging and disfiguring rock faces as climbers hammered them in and out of cracks. This was Chouinard’s first environmental challenge, and he met it with directness and ingenuity.

Deciding to phase out pitons, he and Frost focused on creating an environmentally sound alternative — aluminum chocks that could be wedged, instead of hammered, into cracks. To help educate its customers about what it was doing and why, Chouinard Equipment published its first catalog with an editorial on “clean climbing” (meaning climbing that does no damage to rock faces) by Sierra climber Doug Robinson. Within months, the piton business had dropped to almost nothing, chocks were selling faster than they could be made, and Chouinard had learned a vital lesson that has guided every business decision he has made since: “Build the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis.”

A New Direction

In 1973, Chouinard and Frost moved on to multifunctional outdoor clothing and changed the company name to Patagonia, a name that embodies romantic visions of glaciers tumbling into fjords, jagged windswept peaks, gauchos and condors. To emphasize the connection to the real Patagonia — the southernmost region of South America and the Andes mountains, including Argentina and Chile — they designed a logo based on the Fitzroy skyline, with cloudy skies, rugged peaks and a blue ocean. In addition to clothing, today Patagonia makes packs and luggage for outdoor adventures.

Like the climbing equipment business, however, making and selling outdoor clothing came with inherent risks and challenges. In fact, the first product to wear the Patagonia label nearly caused the company to go bankrupt. Patagonia had contracted with a manufacturer in Hong Kong, but shipments were late, quality was terrible and the shirts shrank. As Chouinard puts it, “We learned the hard way that there was a big difference between running a blacksmith shop and being in the rag business.” The disaster also strained Chouinard’s partnership with Frost to the breaking point. The two friends parted ways in 1975, leaving Yvon and his wife, Malinda, as the sole owners of a struggling, debt-ridden company.

7/18/2014 8:15:40 AM

I always wear Patagonia clothing during my outdoors adventure, I never thought their start was so humble. I recently came across and their products have won my attention from the start, they might grow as big as them eventually.

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