Discussions about the fashion industry thread

[zissou]

well i do think that divestment is a legitimate and under-used option , and is important and helpful in the sense that you do sort of force the concept into adoption as you say , whether or not that happens is another issue ...

meanwhile the trust component is downstream of the more corporate design/retail/marketing component ; the scope of the trust is some function of the corporation . so there is still a dependence on leadership but then again apple has shown some independence i guess from the visionary founder , so ... we will see

i'd also guess the reality is chouinard is 83 years old and has been looking for an exit and so this is best-chance best-intention play , like i'm not disputing your characterization in fact i think exit strategies generally are terrific , but i don't know what the man himself would consider *success* or what i should be expected to affirm ...

I work with a lot of people in the outdoor industry, and they are 100% in admiration of Yvon Chouinard for making this bold move. Chouinard, ever since he started Patagonia, has been light years ahead of other companies in terms of employee equity and environmental sustainability. He's built the brand for decades on the premise of treating people with kindness and doing whatever he can to improve environmental sustainability. Sure, the success of Patagonia depends on extracting resources and producing a lot of gear. But Chouinard's vision is always pushing everyone else to do more to offset these impacts. Twenty years ago, he co-founded 1% for the Planet, which seemed like a radical idea- companies donating 1% of their sales to environmental protection. Now that it's a pretty mainstream idea with over 5,000 businesses across the world participating, he pushes us even further.

Spending a long career building great gear (while making loads of money), almost single-handedly inspiring an entire industry to make necessary changes to treat people and planet better, and leaving us all in shock (in a good way) as his career winds down... if that's not success, I really don't know what is.

If anyone wants to learn more about Chiouinard and Patagonia, Let My People Go Surfing is a great read.

 

[BlakeRVA]

I work with a lot of people in the outdoor industry, and they are 100% in admiration of Yvon Chouinard for making this bold move. Chouinard, ever since he started Patagonia, has been light years ahead of other companies in terms of employee equity and environmental sustainability. He's built the brand for decades on the premise of treating people with kindness and doing whatever he can to improve environmental sustainability. Sure, the success of Patagonia depends on extracting resources and producing a lot of gear. But Chouinard's vision is always pushing everyone else to do more to offset these impacts. Twenty years ago, he co-founded 1% for the Planet, which seemed like a radical idea- companies donating 1% of their sales to environmental protection. Now that it's a pretty mainstream idea with over 5,000 businesses across the world participating, he pushes us even further.

Spending a long career building great gear (while making loads of money), almost single-handedly inspiring an entire industry to make necessary changes to treat people and planet better, and leaving us all in shock (in a good way) as his career winds down... if that's not success, I really don't know what is.

If anyone wants to learn more about Chiouinard and Patagonia, Let My People Go Surfing is a great read.

Not to be that guy, but…

Patagonia Billionaire Who Gave Up Company Skirts $700 Million Tax Hit

Founder Yvon Chouinard structured the transfer of his firm in a way that keeps control within the family and avoids taxes.

www.bloomberg.com

Key excerpts since article is paywalled:
“While many billionaires make living donations with tax and estate planning as the primary considerations, Chouinard seems to have structured his Patagonia transfer with at least a few purposes in mind. Holdfast is a 501(c)(4), a nonprofit that can make unlimited political donations — unlike its cousin, the 501(c)(3). For that reason, any giving to a 501(c)(4) isn’t eligible for income-tax deductions.”

“Still, the moves mean Chouinard won’t have to pay the federal capital gains taxes he would have owed had he sold the company, an option he said was under consideration. On a $3 billion sale, that bill could be more than $700 million. It also helps Chouinard avoid the US estate and gift tax, which is a 40% levy on large fortunes when they’re transferred to heirs.”

 

[zissou]

I can't read the article, but tax savings is a bit beside the point. Where is that $700 million in tax savings going? Largely back to environmental protection. He's not avoiding taxes just to put more money in his pockets. Keeping control of the company within the family makes a lot of sense. Who else is better situated to continue his vision for the brand?

Not to be that guy, but…

Too late, bro. It's very telling that all you feel the need to post is a "what about the taxes???" article. It completely loses sight of the overall purpose.

 

[mak1277]

Not to be that guy, but…

Patagonia Billionaire Who Gave Up Company Skirts $700 Million Tax Hit

Founder Yvon Chouinard structured the transfer of his firm in a way that keeps control within the family and avoids taxes.

www.bloomberg.com

Key excerpts since article is paywalled:
“While many billionaires make living donations with tax and estate planning as the primary considerations, Chouinard seems to have structured his Patagonia transfer with at least a few purposes in mind. Holdfast is a 501(c)(4), a nonprofit that can make unlimited political donations — unlike its cousin, the 501(c)(3). For that reason, any giving to a 501(c)(4) isn’t eligible for income-tax deductions.”

“Still, the moves mean Chouinard won’t have to pay the federal capital gains taxes he would have owed had he sold the company, an option he said was under consideration. On a $3 billion sale, that bill could be more than $700 million. It also helps Chouinard avoid the US estate and gift tax, which is a 40% levy on large fortunes when they’re transferred to heirs.”

Legal tax avoidance is not only fine, but smart. In this case, it's doubly good because the money saved will go to a worthy cause vs. just going to someone's heirs (which, again, is still perfectly legal and smart).

 

[LA Guy]

Not to be that guy, but…

Patagonia Billionaire Who Gave Up Company Skirts $700 Million Tax Hit

Founder Yvon Chouinard structured the transfer of his firm in a way that keeps control within the family and avoids taxes.

www.bloomberg.com

Key excerpts since article is paywalled:
“While many billionaires make living donations with tax and estate planning as the primary considerations, Chouinard seems to have structured his Patagonia transfer with at least a few purposes in mind. Holdfast is a 501(c)(4), a nonprofit that can make unlimited political donations — unlike its cousin, the 501(c)(3). For that reason, any giving to a 501(c)(4) isn’t eligible for income-tax deductions.”

“Still, the moves mean Chouinard won’t have to pay the federal capital gains taxes he would have owed had he sold the company, an option he said was under consideration. On a $3 billion sale, that bill could be more than $700 million. It also helps Chouinard avoid the US estate and gift tax, which is a 40% levy on large fortunes when they’re transferred to heirs.”

I mean, I guess, but aren't the heirs in this case the foundation (I haven't look at the structure, so I don't have any real idea) and isn't the express purpose of the foundation to fight global climate change?

I do think that bureaucracies are subject to corrupting pressures, but it would seem that a non profit that lobbies for a specific cause is at least transparent about its motives. A for profit is always going to lobby for its own benefit, but "well, we want to make more money" is not a great PR point, so it's dressed up, which can create bigger problems.

 

[jaaz16]

501(c)4's are by definition not transparent and have no requirement to be (501(c)3s are more transparent, but have lobbying limits). I'm generally nonplussed about this but do agree with Blake that we should pump the brakes a little on the virtue here. It is virtuous but not solely altruistic. I also found this thread persuasive, how another 501(c)4 was framed in the more classic "dark money" way because of the causes it is furthering:



Moreover I am generally persuaded by the admittedly more philosophical position that fewer billionaires influencing politics through publicly subsidized organizations is better, even if I agree with their causes.

Sorry if this is to CE - I'll stop there!

 

[BlakeRVA]

Largely back to environmental protection.

What exactly does that mean? Are they gonna cut a $100M check to WWF every year? Are they starting their own climate change nonprofit? Are they going to support progressive politicians with climate protection initiatives? All of the above?

We don’t know, so it’s too soon to understand his motives and ultimately praise or criticize him. As of right now, all that has happened is the company has been corporately restructured to a 501c4.

Legal tax avoidance is not only fine, but smart. In this case, it's doubly good because the money saved will go to a worthy cause vs. just going to someone's heirs (which, again, is still perfectly legal and smart).

100% agree, but until we get more details on where those savings are going we shouldn’t treat this move differently than any other ultra-wealthy person playing the tax system.

 

[mak1277]

What exactly does that mean? Are they gonna cut a $100M check to WWF every year? Are they starting their own climate change nonprofit? Are they going to support progressive politicians with climate protection initiatives? All of the above?

We don’t know, so it’s too soon to understand his motives and ultimately praise or criticize him. As of right now, all that has happened is the company has been corporately restructured to a 501c4.

100% agree, but until we get more details on where those savings are going we shouldn’t treat this move differently than any other ultra-wealthy person playing the tax system.

Im pretty much Of the opinion that people should do whatever they want with their money, so long as it’s legal.

More specific to this case, based on prior actions I trust Chouinard to continue to do things I personally find worthy (not that my opinion [or yours] matters one bit).

 

[zissou]

We don’t know, so it’s too soon to understand his motives and ultimately praise or criticize him. As of right now, all that has happened is the company has been corporately restructured to a 501c4.

SMH. Is today the first day you've heard the name Yvon Chouinard? See my previous post, or go check out Let My People Go Surfing from the local library.

 

[LA Guy]

501(c)4's are by definition not transparent and have no requirement to be (501(c)3s are more transparent, but have lobbying limits). I'm generally nonplussed about this but do agree with Blake that we should pump the brakes a little on the virtue here. It is virtuous but not solely altruistic. I also found this thread persuasive, how another 501(c)4 was framed in the more classic "dark money" way because of the causes it is furthering:



Moreover I am generally persuaded by the admittedly more philosophical position that fewer billionaires influencing politics through publicly subsidized organizations is better, even if I agree with their causes.

Sorry if this is to CE - I'll stop there!

Please do feel free to take this to CE. I think that the political leanings, especially towards climate change legistlation, of those supporting Chouinard's actions, are pretty transparent.

I used to be much more conciliatory and want a much more civil discourse with conservatives, and much more precise and careful framining, and wrt social issues, but everything that has happened since 2016 has taken that out of me. Now if I do that, I just feel like a fool.

 

[mak1277]

Please do feel free to take this to CE. I think that the political leanings, especially towards climate change legistlation, of those supporting Chouinard's actions, are pretty transparent.

I used to be much more conciliatory and want a much more civil discourse with conservatives, and much more precise and careful framining, and wrt social issues, but everything that has happened since 2016 has taken that out of me. Now if I do that, I just feel like a fool.

Don’t tell anyone, but some of us conservatives are also in favor of conservation and working to preserve the environment.

 

[Texasmade]

SMH. Is today the first day you've heard the name Yvon Chouinard? See my previous post, or go check out Let My People Go Surfing from the local library.

Ngl, I never heard of him until this announcement recently.

 

[zissou]

Ngl, I never heard of him until this announcement recently.

Totally fine, but he’s saying “it’s too soon to know his motives…” which are actually laid out pretty clearly in his book, never mind his actions over the past 4-5 decades.

 

[hendrix]

I kinda agree that every move shouldn't just receive blanket praise, and I do think everything is fair game when it comes to wanting full transparency.

But
- it's not tax avoidance. Just because you're not paying CGT doesn't make it actual tax avoidance. It's just a case where cgt doesn't apply...
- political contributions and lobbying are a reality
- this is not the same thing as other billionaires lobbying for actual state subsidies for themselves

 

[BlakeRVA]

SMH. Is today the first day you've heard the name Yvon Chouinard? See my previous post, or go check out Let My People Go Surfing from the local library.

I’m not sure why you’re being so defensive. It’s cool that he’s taking tangible steps towards climate activism, but it’s not an act of pure philanthropy. It’s a win-win scenario. He supports something he cares about, intelligently maneuvers around taxes, and secures his families political relevance. Let’s wait and see the tangible outcomes from this. I’m not afraid to admit if I am wrong.