- Patagonia Purpose Trust will hold 2% of total stock, with remainder taken by Holdfast Collective
- Company expected to give away around US$100m annually
The founder and owner of outdoor clothing and sportswear brand Patagonia has announced he has given away the company to a charitable trust.
Yvon Chouinard, who founded Patagonia in 1973, said that the new ownership structure means any profit not reinvested in running the business will go towards tackling the climate emergency.
Patagonia’s shareholding will be split between two new entities. Patagonia Purpose Trust will oversee the company’s strategy, holding two per cent of its voting stock. The Holdfast Collective, which is responsible for the brand’s economic interest, will hold the remaining 98 per cent and distribute an annual dividend.
The amount is expected to about US$100 million, which will be used to protect nature, promote biodiversity and fight the environmental crisis.
Patagonia’s estimated revenue was US$1.5 billion this year. Chouinard has a net worth of US$1.2 billion, according to Forbes.
“Despite its immensity, the Earth’s resources are not infinite, and it’s clear we’ve exceeded its limits,” said Chouinard.
“Instead of extracting value from nature and transforming it into wealth, we are using the wealth Patagonia creates to protect the source.”
The California-based firm already donates one per cent of its net revenues in cash and in-kind donations every year, primarily to grassroots environmental non-profits. The bulk of Patagonia’s products also use recycled materials.
Last year, Patagonia was named in the inaugural Laureus Sport for Good Index class, which shines a light on brands having a meaningful societal impact on the sports industry.
The 83-year-old Chouinard, a former rock climber turned businessman and environmentalist, had considered taking Patagonia public or selling the company and donating the money to charity.
However, he stated both options would have forced him to cede control of the business.
“Even public companies with good intentions are under too much pressure to create short-term gain at the expense of long-term vitality and responsibility,” he said.
Other businessman who have recently donated their wealth include Matthew Moulding, founder and chief executive of The Hut Group (THG), whose brands include sports nutrition brand Myprotein. Last year, Moulding said he would gift UK£100 million (US$115 million) of his shares in the company, as well as his salary, to charity.