It’s been almost two years since Patagonia began urging its outdoorsy customers to buy less—to sit out “Cyber Monday” and ask themselves: Do I really need a new fleece jacket or, for that matter, a state-of-the-art, 1,000-fill, dry-clean-only $700 parka and all the carbon burning that comes with it?
Not surprisingly, the corporate plea didn’t work, which is to say it worked perfectly for a burgeoning company in the business of selling $700 parkas. In 2012—which included about nine months of the “buy less” marketing—Patagonia sales increased almost one-third, to $543 million, as the company opened 14 more stores. Last year, revenue ticked up another 6 percent, to $575 million. In short, the pitch helped crank out $158 million worth of new apparel.
Meanwhile, Patagonia founder and owner Yvon Chouinard has estimated revenue will continue to grow about 15 percent a year. Not a bit of this business boom seems to sync all that well with a mantra of “reduce, repair, reuse, recycle.”
Patagonia ran an ad imploring “Don’t Buy This Jacket,” while asking customers to sign a pledge to “wrest the full life out of every Patagonia product by buying used when I can.” People both signed the pledge and bought the jacket en mass.
This is where we should note that Patagonia is to corporate sustainability what Steve Jobs was to computers. It donates 1 percent of its revenue to environmental causes and co-founded the Sustainable Apparel Coalition, in which such companies as Target (TGT) and Wal-Mart (WMT) pledged to lighten their environmental footprints.
Patagonia also makes fleece jackets out of recycled bottles and goes out of its way to use organic cotton. Most of the electricity at its headquarters just north of Los Angeles comes from solar panels.
In short, one could argue more business for Patagonia is a good thing for the planet, particularly if it is commerce that otherwise would have gone to a less-green competitor.
But that dynamic doesn’t make the “buy less” mantra sound any less sanctimonious, especially when it’s paired with double-digit revenue gains. Sustainability consultant Eric Lowett pointed out that Patagonia’s new Web stores for used apparel—on both its own website and on eBay (EBAY)—are a great way to spur customers to trade up to new products.
Its green campaign has also proven to be a very effective branding exercise. Patagonia, in addition to selling Gore-Tex and neoprene and really fancy Long Johns, started hawking feelings of bonhomie, a little green piece of mind.
None of this has been lost on other apparel retailers. Most notably, H&M (HMB:SS), the second-biggest clothes seller in the world, just announced a recycling program in which shoppers get discounts for turning in old apparel. But the Swedish company, which routinely posts a profit margin of around 15 percent, structured the initiative so that discounts wouldn’t top 17 percent.
These green campaigns are undoubtedly noble. After all, Patagonia’s revenue growth in the past two years put an additional $1.6 million in the coffers of environmental groups. But they aren’t as altruistic as they seem.
Here’s how Choinard described the dynamic to Inc. magazine a few months ago:
“I know it sounds crazy, but every time I have made a decision that is best for the planet, I have made money. Our customers know that—and they want to be part of that environmental commitment.”
Indeed they do.
