Company’s Environmental Focus Leads to Increased Profits

Posted on May 29, 2012

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Patagonia executives say that sales have soared despite the struggling economy, and that its environmental focus is the key to its success.

Patagonia, theVentura, CAbased outdoor apparel company boasts that its profits have tripled since 2008.  What’s their secret?  If you ask the company’s executives, they will tell you it’s their focus on the environment that keeps customers coming. Patagoniawas the first major clothier to make fleece jackets out of recycled bottles. Nearly a third of the power for its headquarters and adjoining child-care center comes from solar energy. And it donates 1% of its sales to environmental causes.  Those in the company claim that customers are willing to pay $25 for a T-shirt, $20 for wool socks and $180 for a light jacket because they know Patagonia inflicted less damage on the environment than other clothing makers did.

WithPatagoniabeing a privately held company, its finances are not public, but it says it’s riding a growth curve. It opened 14 new stores last year, bringing to 88 its wholly owned retail outlets throughout the world. Executives said the company had $540 million in sales in the 12 months that ended in April, an increase of more than 30% over the same period a year earlier.

Patagonia co-founded the Sustainable Apparel Coalition, a group of retailers and clothiers that are committed to slashing the environmental impact of their operations; though many in the industry realize that their environmental focus isn’t the only reasonPatagoniais doing so well.  Outdoor product sales in theU.S.totaled $25.3 billion in 2011, representing an increase of nearly 11% compared with 2010, according to the Outdoor Industry Assn., a trade group for outdoor retailers.  Many Americans have been looking at outdoor recreation as an alternative to lavish, international travel in a time of widespread economic hardship.

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