business news in context, analysis with attitude

Go figure.

Bloomberg Businessweek has a story about how, in the two years since Patagonia began a campaign imploring its customers to "buy less" as a way of addressing the problem of conspicuous and environmentally irresponsible consumption, the company's sales have gone up almost 38 percent to $575 million, and Patagonia continues to project annual sales increases of 15 percent.

Now, while it is aware of the dichotomy, Patagonia management is engaged in a new, similarly-themed campaign - selling used clothes under the rubric "Better Than New." The story says that Patagonia "is selling used clothing at five of its retail stores ... It grants store credit for trade-in gear, reconditions the garments, and stocks them as 'Worn Wear,' generally at prices that provide a 50 percent profit margin.

"It is the latest gambit in the company’s effort to sacrifice its profits for the environment—or at least tell consumers it’s willing to. The green marketing, however, has proved very effective at cultivating the same growth Patagonia is railing against."

The company concedes that some might accuse it of hypocrisy - of promoting the sale of less while actually selling more. But it says that its goal is to develop a business model that is sustainable in a myriad of ways, and proving that being a responsible steward of the environment is not inconsistent with making a buck.

And so, Bloomberg Businessweek writes, "Rather than back away from the buy-less program ... Patagonia is turning up the volume, launching a new publicity campaign today dubbed 'The Responsible Economy' to highlight its environmental work. Patagonia is hoping the initiative will get executives to question business models that rely on compound annual growth (which is basically every business model when one considers competition and sheer population dynamics)."
KC's View:
This is going to be a hard one for a lot of execs to accept, since most leaders and managers are judged on the bottom line of growth, and things like environmental responsibility are not often factored into assessments by investors and boards of directors.

But I do think there is a growing class of consumers out there that wants to do business companies that do good while doing well ... and certainly there is nothing about this story that dissuades me from wanting to shop at Patagonia next time I need something in fleece.