US: As Patagonia pivots to combat climate crisis, how has the ownership change been received?
The outdoor clothing retailer, Patagonia, now has two owners, namely the Holdfast Collective and the Patagonia Purpose Trust, as announced by its founder, Yvon Chouinard, on 15 September 2022. The company remains a for-profit one but will now donate 1% of its sales per year to the Trust, to spend on climate causes.
What effect did this news have on the brand?
According to YouGov BrandIndex - which tracks consumer sentiment towards thousands of brands daily – Patagonia’s Index score (an overall measure of brand health made up of General Impression, Customer Satisfaction, Quality, Value, Corporate Reputation and Recommendation) has climbed since the announcement. It has increased from 14.9 on 15 September to peak at 17.7 on the 17th.
Its Reputation and Buzz scores performed well too. Between 15 – 18 September, the company’s Buzz score leaped from 5.9 to 17, while Reputation went up from 16.3 to 23.4. Where Reputation is a metric which checks whether consumers would be proud or embarrassed to work for the brand, Buzz measures whether consumers are hearing more positive or negative things about the brand.
Since the initial announcement was made, some commentators have, perhaps churlishly, pointed out that by transferring ownership in this way, Chouinard will not have to pay the $700m in taxes that a sale would likely have incurred. And judging from the metrics, some of this criticism may have stuck - Index, Reputation and Buzz scores have since slid to 12, 16.6 and 8.5 respectively.
Nevertheless, Patagonia is well-positioned to grow its business - almost half (48%) of consumers who would consider the brand are prepared to pay more for products that are good for the environment and are interested in sustainability. The brand’s climate credentials are a central plank of its business and for many consumers, this move is likely to burnish them.
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Methodology: YouGov BrandIndex collects data on thousands of brands every day. Patagonia’s Index, Reputation and Buzz metrics scores are delivered as a net score between –100 and + 100. Scores are based on an average daily sample size of 277 US adults between 1 – 20 September 2022. Figures are based on a three day moving average. Learn more about BrandIndex.