President Trump traveled to Utah today,
where he dramatically cut back the size
of two national monuments in that state.
When president Donald Trump announced plans
to scale back two national monuments in Utah,
there was outcry from a lot of people.
One company in particular.
Patagonia really is a resistance brand.
They embraced the liberal resistance
against President Donald Trump,
and really put themselves at the forefront of that movement.
In 2017, it sued the Trump administration
for sort of slashing the size
of these two national monuments in Utah
that were kind of meccas for climbers.
It said at the time joining the legal fracas
was both extraordinary and obvious.
So the company's general counsel said
it took exactly one email to the board
to decide to actually do this,
and the case is still out.
Well, I think the only thing
this administration understands is lawsuits.
We're losing this planet,
and we have an evil government,
and I'm not gonna stand back and just let evil win.
This year, it got even more active.
It changed its mission statement to,
"Patagonia is in business to save our home planet."
And then it manufactured these little tags
on some of its clothes that if you flip them up
it says "vote the assholes out."
Very implicit running up to the election,
and it launched a digital tool
to help people find their polling place,
and on that digital platform
it says "vote the climate deniers out of office"
again and again on a loop.
This isn't the first time
that taking a stand has paid off for Patagonia.
The business, which is now worth over a billion dollars,
was built on it.
I couldn't care less about making more money.
But by doing the right thing,
it always ends up making me more money.
So is this all a strategy,
a sort of premeditated strategy?
Who knows? I mean, Chouinard's been very vocal
from the start and makes no bones about,
he calls himself a dirtbag climber
and an accidental entrepreneur.
So I don't think he's fudging this,
but what's important is that
it's sort of a textbook marriage of philanthropy and profit.
If you wanna understand the entrepreneur,
study the juvenile delinquent,
'cause you know, they're saying,
you know, "This sucks,
and I'm gonna do it my own way."
Of course, like every other teenage kid,
I had no idea what I want to do with my life.
When I was 16 years old,
I took off, and drove across the country,
went into the Wind River Range, and discovered mountains.
Patagonia was born out of rock climber
Yvon Chouinard's first business, Chouinard Equipment,
which made and sold climbing supplies.
Yvon Chouinard was a blacksmith in the '50s,
and he started selling climbing gear
out of the back of his car
that was less harmful to rock faces.
This is sort of the origin story of the company.
It's called itself the activist company,
not a activist company.
Six months out of the year,
Yvon Chouinard is a blacksmith.
He makes mountain climbing gear.
The other half of the year he climbs.
In 1968, Yvon Chouinard and four friends,
including Doug Tompkins, the late founder
of The North Face brand,
embarked on the ultimate road trip
from California where they were based
to Patagonia in Argentina.
The mountain was in a good mood,
dazzling sun, calm air all day.
If this weather holds,
they could be on the summit within days.
This trip became a documentary
about these friends who were hippies in the '70s
climbing in Yosemite, where the sport became a lifestyle,
and how these friends became pioneer
of the outdoor industry.
Chouinard moved from selling pitons to polyester,
and in the '70s, Patagonia was born.
In 1973, Chouinard and his wife Melinda opened
the very first Patagonia store in Ventura, California,
where the company's headquarters remain today.
Melinda Chouinard was the driving force
behind many of the employee benefits,
like on-site childcare, that helped the company achieve
an impressive 4% employee turnover rate.
The retail and consumer product sector average
is more than triple that at 13%.
I do think that Patagonia was a leader,
one of the first corporations
to take into account, you know,
the human capital, and make sure that their staff,
all their employees were cared for in many ways,
not just wages, but also they just cared about their people,
and knew that that's a good business model.
Patagonia began donating 10% of its profits
to grassroots organizations in 1985.
This later became the 1% of sales
that Chouinard labels an earth tax.
I don't think it's philanthropy.
It's rent for us living on this planet.
While Patagonia was creating the blueprint
of how to be a socially conscious brand,
it was also turning a profit.
It even made Inc. magazine's list
of the fastest growing privately held companies.
So every time the company makes a decision
to do something socially, environmentally active,
it is met with success, and that isn't lost on Chouinard,
or any of the other leaders of the company.
The more money Patagonia made,
the more it gave away under its philanthropic program.
Between 1989 and 1991, the payroll grew by 40%.
But trouble was on the horizon.
I think for 1991 we are looking at a recession.
The question is how deep that recession is going to be,
and how long we'll be in it.
Sales fell flat,
and the bank called in the company's revolving loans.
A company that prided itself on taking care of its own
laid off 120 people, roughly 20% of its workforce.
That was when we decided
that we were gonna start doing things differently.
We were gonna start running the company
as if it's going to be here 100 years from now.
With a renewed sense of purpose,
Patagonia was ready for what it called business unusual.
It started with the costly move
to recycled and organic materials
before launching a clothing repair service
to discourage fast fashion,
and Patagonia's influence was growing.
What was intended as Chouinard's philosophical handbook
for employees became an international blueprint
for sustainable business printed in 10 languages.
What's interesting to me is that all this,
I hate the term on brand, but it's very on brand.
It really works for the kind of company he's created.
It works for the kind of employees
he's been able to recruit and retain.
It all, it is very seamless in terms of the identity
of him and the company and what it means in the marketplace.
So over time, the company's mission
and its marketing have become the same thing.
The inflection point came in 2011,
actually Black Friday.
Patagonia took out a huge ad in The New York Times
that said "don't buy this jacket,"
and it sort of got into the nitty gritty on, you know,
the carbon footprint and the water footprint
that goes into, you know, a piece of apparel like a parka,
and at the time Chouinard said
the best jacket for our planet is one that already exists.
So the company at that time said it needed to address
the issue of consumerism,
which coming from a for-profit business
hits pretty hypocritical.
As the company encouraged its customers
to buy less, its annual sales increased by almost 40%.
The stance of this is hypocritical was loud,
and constant talking about consumerism in a critical light
while very much being a part of it.
Fast fashion is top on the list
of environmental destruction,
and not just destroying the environment,
but impacting human health.
They are in the fashion industry.
They're a clothing retailer,
and to come head-to-head with that is courageous.
You're not only just trying to create a product
that'll last, but you're also educating
an entire generation of people to understand
that whole ideology that we don't need
to change out our outfits.
In 2014, Rose Marcario was appointed as CEO.
During the next six years, she grew Patagonia
into a billion dollar company,
while also scaling up its environmental goals,
and bringing a more political voice to its activism.
Yvon had this model where he was basically saying
you can have a great business, you can make quality product,
but you can also do the right thing
by the environment, by your employees, by your community,
and that to me was the most holistic vision
of business that I'd ever seen.
So right now, Patagonia has a team of about 20 people
solely focused on activism and grants,
and this all comes at a time in the past decade
when consumers are paying much more attention
to the social footprint of companies
and where they buy their goods.
So what's happened is all this is
good business for Patagonia.
In the past 10 years, revenue and profit at the company
have roughly quadrupled.
It's private, but the estimates are it does
about a billion dollars in annual sales, which is sizable,
and that's part of the reason why
it's been such a fortuitous cycle.
As it's ramped up its activism,
and become more vocal on these things,
it's resonated with the market.
As the company branched out into other areas,
including a venture capital fund for environmental causes,
and sustainable food, revenue reached a new peak
of over $1 billion in 2017.
But this was still small change compared
to fast fashion heavyweights like Nike
who made $37 billion that same year.
Patagonia's conscience hasn't always been reflected
in its customer base either.
Personalized vests have become the go-to corporate uniform
and the expensive price tag has helped the brand
earn the nickname Patagucci.
It's expensive stuff, it's expensive apparel,
and that is part of their calculus in terms of the activism.
You know, a lot of the more sustainable parts
of the supply chain, there's a premium
for organic cotton, or sustainable down.
The Patagucci label is a symptom of that.
So Patagonia products are very popular
of course with people who are active in the outdoors,
but also with people are not as active.
For instance, you know, people in finance
wear the Patagonia vest to go to the office
and that's because of the image that the brand projects.
And so, they asked to live with the fact
although they, you know, preach for the environment
and want to stand for good,
they're victims of their own success.
Patagonia set sales records
in the first three years of the Trump administration.
Now in 2020, things have changed.
As COVID-19 brought the business world to a halt,
and the American people voted in a new administration,
Patagonia appointed Ryan Gellert as CEO.
As far as its CEO transition goes,
this one's happening quite strangely.
There's no real budget for next year yet,
because of everything that's going on,
and all the uncertainty around that.
Patagonia's new focus is going to be on forging
a relationship with the Biden administration.
It should be a more close relationship,
but Gellert still has his guard up.
During the Obama administration, they didn't always agree,
and he expects the same with Biden in the White House.
They plan to bring litigation wherever needed
against any government needed
about the issues that they care about
and that's climate change, and the environment.