With a capital, one Quicksilver card, you earn unlimited one point: five percent cash back on every purchase everywhere. That's unless at one point, five percent cash back on everything you buy an unlucky, really means unlimited with Quicksilver theirs oh limit to how much cash back, you can earn capital one. What's in your wallet, credit approval required capital, one bank, USA, in a. Quandary its nineteen. Eighty eight and in Lighthouse point floor. Yvonne Shoe Nord stands on a dark and shields his eyes from the sun. The path owners scans the expensive yachts anchored along the walkway at the far end he Spock's the forty two foot, status symbol. He searching for as you, I'm so bored and oh man, wearing a captains hat pokes his head up from the cabin

I have on doktor coming yes, because we might take it easy some chill guava Jews with his snow White weird and sailors hat camel doesn't immediately register as a management guru, but he to be a strategy for Xerox and IBM. Now he's a after adviser to America's biggest companies. This seafaring business, Yoda rakes in a million dollars a year dispensing his wisdom, I would use in hand she not explain the dilemma that brought him becoming thanks for seeing me my problem, isn't what you would expect very soon Patagonia sales will pass one hundred million dollars a year. Our growth its relentless, and I don't like it. The down, I'm a craftsman, not a business man. I see tell me of on what was

You do with money was no object Guess I'd like to spend my life sailing the South Seas. Searching for the perfect wave deserve seeking out. Best placed catch bone. Fish So why haven't you so Patagonian gone and done it already? Well, I'm pessimistic! You see pessimistic about our planet's future I believe I should use Patagonia help somehow kind of the way we donate one percent of profits to environmental causes. So, I guess I'm still in business, so I can give money away Can he leaned forward and lock size with shewn art that is bull shoe large mouth So often in shock, may leans and even closer. If you want give money away, sell your business and start a foundation hell if sell Patagonia to the right people. Now

donating, one percent of the profits, because its great marketing. But I worry, what'll happen to Patagonia if I sell it coming folded his arms and replies into his chair That case of on Maybe you're just lying to yourself about why you're in business shoe leaves the yacht even more confused than when he arrived. He came for answers now, He has to solve a riddle if he does want Patagonia to grow, but he will walk away Then just what the hell does he want to do with it. If you looking for a bit of escapism, try getting lost in the rich Linz. Family drama story starts with Eleanor and Michael Rich, lend having just lost their parents and a plane crash, as they reckoned This tragedy, something about their fathers legacy. Just isn't: adding up the symbol,

come face to face with two choices, protect the family empire or losing everything to find the truth, you can subscribe to blood ties and apple pod. Spot of or wherever you're listening now from wondering. I'm David Brown- and this is business wars. On the last episode. Patagonia struck gold with colorful synthetic clothes at one over hikers in fashion, east is alike, but while only a boom, the North Bay

battle to grow in a flat market flooded with cheaper asian imports. Now the north this is trying to put the challenges of the eighties behind, with the help of its new owner odyssey, international and he's found her bill. Simon, isn't looking for steady progress now here, wants to scramble to the summit. This is so for then, and the art of business? It's ninety and at Berkeley. California, Simon is in the north, face conference room listening to a pitch from an unlikely business man that man is got Schmidt and he's anything but slick his shirts on tucked his dirty on mullet on combed and its crowned with a tired looking baseball cap. But in ski circles Schmidt is alleged.

He's an extreme skeer, no scratch that he's the world's best extreme scare. A man who wows powder hounds with death, the sense down sheer slopes where even the most minor error can be fatal, but a claim doesn't pay the bills. So now, Schmid is hoping to cash in on his DARE devil reputation with a little help from the north face. He stands awkwardly before and and lays out his vision north, ace gears awesome, but it still fall short for scares like me I am always having to make my own adjustment slight sewing on extra pockets or padding What extreme scares need is gear design for them. Like this Schmidt hands Simon a hand drawn illustration of a bright, yellow and black ski jacket, the drawing covered in notes about the jackets features, impact protecting body, armor, multiple

zippers for ventilation tougher fabric at friction, points to reduce where there even a sheepskin line pocket for sunglasses. Jack is just the start of good ideas and designs for a whole lie. Our shells to base layers. I call it steep tech. Simon puts the illustrations down. Where are you nearly put a lot of work into this. But about sell the extra skiing. Here doesn't have a future, because it's something only a handful of people can do. Schmidt tries to salvage his ailing pitch. Surely there be some crossover ordinary scares, love extreme ski movies and I'm always meeting folks. You wanna do extreme skiing, Maybe- think for years, awesome and buy it anyway, even if they dont need it Simon. It's back in his chair, Schmidt's got a point made Some people will, where this stuff to broadcast their perceived prowess. Besides,

stream ski line would also reaffirm the north faces the go to brand for even the most niece. I performance gear might be across over effect. In that does happen with our every year. Ok Ok, maybe there's something in a premium price specialist line, but don't that much still doubt anyone's gonna want to stop sit downbeat, beat assessment, Schmidt doesn't care the north. This is going to pay him to co design, his own ski. Where line after years of living hand mouth even a small, pay day is cause for celebration, but while been, face gets to work on steep tech, black cloud. Its or descending on Patagonia. Each July, nineteen, ninety one Patagonians offices in Ventura, California, there's fear in the air. The usual upbeat by this gone employees.

Speak only in whispers and all eyes are on the meeting room inside there's a consultant and he's here to call the ranks Everyone recoils is the meeting room opens in the consultant steps out. He scans the open plan office and then makes a bee line to the desk of a woman with long dark, hair, as he leads or into the meeting room. She changes worried glances with her colleagues minutes later she re emerges eyes red with tears and the unemployed, The day continues more fall by late, afternoon. One hundred and fifty people are gone. That's it the patagonian entire workforce. Company that's long felt more like a family than a workplace. Its brutal most employees Patagonia, is a home away from home where they enjoy on site child care, much freshly,

pineapple muffins input, work aside. Whenever the serfs up Day draws to a close. Von sooner gathers the survivors together, I spent years. Talking about slowing Patagonia is rocketing growth, but today's cuts aren't. Choice therein, necessity for by the recession. That's right, seeing the nation today's when the darkest stay in Patagonia history, but it had to happen because one act Employees can contain himself and cut she knocked off had to no the sales figures. We are on track to growth twenty percent this year. She nodded turns to the employee, you're right, you're right, but weep and four forty percent growth, and we hired and spent on that basis The recession means retailers are ordering last leaving us with excess inventory. Our ban struggling to in cutting our credit line. She now

lets the news again before. Continuing truth is we ve been growing at an unsustainable rate, that is never happening again from now on, we grow sustainably. And though Patagonia Workforce doesn't know it. There's more change coming four years of conflicting feelings shoe nor finally worked out what to do with Patagonia it's late summer. Ninety ninety one and just worth of San Francisco, a group of exhaustion Patagonia employees or sitting around a campfire. They ve spent the day, hiking following sooner deep into the Moraine headlines and they're, not the first four weeks. Not only is fifty two euro leaders been taking employees on similar tracks,

cease using to instil a new business philosophy and that there emerged in their surroundings, gazing out the crashing waves of the Pacific under a canvas of stars. She nodded In today's lesson, nature is threatened by an economic system that value short term profit and Relentless Grove Patagonia. We want profit, but we do not seek growth. Our use, come first that means sacrificing sales. His face by the fire, she nodded elaborates. We will minimize our environmental impact and The tone for the damage we do. We will their give one percent of sales or ten percent of profits to environmental causes, which you, is greater than I continues. She nodded, turn Sherman doling out nuggets of homespun wisdom that match

business theory, environmentalism and mysticism let us learn from the Iroquois. They plan for seven generations only by acting as if we will be in business for a hundred years can we grow sustainably in rock climbing, You can push yourself to the edge, but never over it's the same for business we meet No, our limits companies. That try to have at all, only die faster. We must each the world that there is another way to do business by the lessons and please around the camp fire or convert, Patagonia is no longer just a company? It's an explorer into uncharted territory, to reinvent how business is done,

it's a January night in ninety. Ninety two and Scott Schmidt is driving through midtown Manhattan. Extreme scarce feeling, good ball. The north base introduced his steep tech, extreme ski, where and say are surpassing all expectations so tax already become one of the companies best selling lines. The north face chalked up that success to Schmidt Spain, but that's not the only reason Schmid stops at a red light and peers around in the dark and streets. He's in a crime area. The city windows abroad the wall is covered in graffiti, but then Schmidt spots, something unusual: cranes neck for a better look and his jaw drops no way across the street. A drug others, working the corner and he's dressed head to toe in steep tech, Schmidt drives pass the dealer, he thinks that guy

gotta be a one off, but he's not. Across the city, graffiti artists and corner drug dealers are turning the north faces mountain gear into street, where they like the deep pockets which are per for carrying spray cans and product Pritchett how the company's bulky parkers make them look big, but most of all they love how the north faces apparel keeps them warm even on the coldest nights and this Trans just getting started August, one thousand nine hundred and ninety three and the Wu Tang Clan's new track method. Man is taking the hip hop scene by storm the clan or now in tv stars and in the video as they wrap in a derelict building too entourage posed in red and yellow steep tech jacket video ushers in a loving between hip, hop and the north face,

do rappers from LL cool J to Big AL will be wearing North face and the notorious big and das effects will be named, checking the brand of their lyrics with no planning it all the North Bay. Is crossing over from the slopes and into the inner cities and where these wrap stars lead, so urban America will follow, but the brow, New street crime has come too late to shore up its bottom line nineteen eighty eight north face owner odyssey internationals, been assembling an outdoor empire, its bought not just the north face, but many of its rivals too. Yet just as Yvonne she Renard warned Patagonia staff round the campfire companies try to have it all only die faster. Honesty is now in bankruptcy, tripped up by its to expand with creditors paying for their money odyssey, finds itself having to dismantle its outdoor empire itself.

Off brands like Marmot in Sierra designs. Then it puts North, based on a corporate crash diet to get it ready for auction odyssey, twelve North faces twenty outlets stores, their Berkeley factory also gets the chaplain now just Patagonia, the north face will gets gear on the other side of the Pacific, and now The bloodletting Don odyssey puts the north face up for sale. Its main eighteen. Ninety four and in an open court room the North face auction is under way bids opened. It thirty three million dollars, but the price soon past fifty million now just bidders remain. One is deckers Company that makes sandals the other a consortium led by two members of the North face executive team, Deckers Representative ups, the stakes

Fifty five point: nine million the northeast secular huddled briefly Fifty seven million the woman from Deckers holds up her hands in defeat, but then one of the earlier. Bitters rejoined the race raincoat manufacturer, London fog. Fifty seven point: one million north face team winces there's no way their walking away over one hundred thousand dollars. Fifty nine million, the judge looks at the man from London. Fog and slowly raises his gavel. Guy once guiding twice and sold we're face executives have one and now they get to enact their master plan and that plan is to take the north face, to the stock exchange and use the money raised. Two

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heard the stories of TED Bundy and Charles Manson, but what about Rodney I'll call the dating game killer? He may have been even more deadly. How was it that a cold blooded serial killer made it onto a tv show that millions of people watched and no one could see what he really was. This is the story of the most famous serial killer that you ve never heard of subscribed to day to day dating game killer and other great shows from wondering on Apple pod, cassowary. Every year. Listening right now. its July nineteen. Ninety five you stand. Five of America's best climbers are closing in on the summit of Mount the teacher and here on the north faces dime. When the cup

recruited the athletes into its new dream team. They could barely book Their ears, now there being paid Seventy five thousand dollars a year to go climbing around the world in north face gear and to keep things on you're taking on the Fang like peaks of this remote corner of Central Asia, but ass they near the top danger strikes, dark clouds Roland all around thunder, almost immediately dream. T member Lynn Hill feels a stinging sensation, racing upper spine, Her hair strange to stand on end fellow climber, Gregg Child Johnson, get down hill curls into a ball sound like a swarm of angry bees. Ripples through the air, its Alex the dream team or thirteen thousand feet a month. Mountain and caught in an electoral

the buzzing starts. The climbers move fast as they re sought with steep slope covered in slushy, snow child Hands hill, and I sacks take this week. Get out of here before we get out. Follow me. He'll follies child through the snow within another team members. Shells look to see a wall of whitewashing towards the avalanche slams into knocking over the edge she lashes out with the acts, but it just cut through the soft snow shoes. Down down before coming to a stop. He'll live Sir head up and gasps. She's right on the edge of a deep crevasse she's escaped death by mere inches. Months later climbing magazine runs a feature on the door teams Kurdistan adventures soon, the world's top openness are beating

ass to the north, face hoping to land a juicy sponsorship deal and, with ever new dream team recruit the North basis, reputation as gear maker for the pros rises. But while the north face is finding new ways to boost sales, Patagonia is about blow a hole in its finances. It's late, one thousand nine hundred and ninety five and in Ventura Patagonia is coming to the end of an eighteen month. Struggle back in early one thousand, nine hundred and ninety four. The company got a shock when an environmental consultant told him that cotton, not polyester the most damaging fabric they used because he's leadership team was alarmed by the consultants revelations about how cotton fields are drenched in pesticides that leak into rivers and annihilate insect life. Pedigree. Vowed to quickly switch to organic cotton, but every step on the way has been a struggle

limited supply of organic cotton, forced them to shrink their range of cotton clothing and most textile mills refused to work with it, but then the company slammed into a wall. Organic farmers don't use pesticides as result. Organic cotton. Covered in sticky, a fit honeydew that clogs up the mills. For a moment it seemed like the end Our project had been derailed, but a textual mill in Thailand, save the day by freezing the cotton before spinning now just one challenge- remains: cost organic, and is three times the price of normal cotton in someone's gotta put the bill and impact only a conference room. That's left the company sales chief in despair, we can raise prices. Three hundred percent retail

and customers want, except that the team doesn't know what to do. But then one executive makes a bold suggested we can put our profit margins and limit the retail price to no more than ten dollars above the competition in most companies. That idea would be heresy. Patagonia cells, thirty million dollars worth of cotton close every year, cutting margins wipe out a major profit source, but this is Patagonia and at Patagonia values, Trump profits one by one, the team members back the idea They know. It's gonna hurt the company's bottom line, but the planet comes. First, Patagonia is about to become the first major clothing brand to bring organic cotton to the market. A few weeks

Peter Patagonians, organic cotton close if the stores and sales tank before Switch customers could expect to pay for dollars more for a Patagonia cotton t shirt than one by a rival like Colombia Sportswear now the Patagonia T costs eight dollars more. The higher price tags repelled customers, few of them care or know enough about cottons environmental impact of pay more. The result, A double whammy of lowered sales and reduced margins slashes the company's earnings from cotton products by a third But after the initial hit sales start crawling up again, the appeal of the Patagonia Brand, slowly overcomes people's aversion to the higher price point once more: Patagonian move inspires apparel giants like Nike to conceal. Using organic cotton to but

Patagonia is putting planet before profit. The north face is adopting a more traditional pad. Its July. Nineteen. Ninety six and on street the North Base executive team minutes. Investors are celebrating this morning, the company floated on the NASDAQ stock opened at fourteen dollars. And ended the day at twenty eight now the company's gotta these six million dollar war chest to play with and see oh Bill Simons thinking, big beaming with pride Simon addresses the Wall Street investors and bankers who made it happen. Two years ago we were bankrupt today, We deliver sales of one hundred and twenty million dollars a year and theirs Your things to come. We enter it makes the north face a brand rival gap and Nike by to them in four we're going to be a billion dollar company there's applaud and cheer, but

The north faces raised Wall Street expectations. It's gotta, deliver and scrambled to the top company will find itself look over the precipice on the next episode The north face burns out genes giant moves into the outdoor meaning and Patagonia doubled. On its principal from wondering this is business wars. We hope you enjoy this ever so. Please subscribe on Africa cast Spotify Google podcast thy heart radio sticker or wherever you listening right now, you'll know there's a link on the episode notes. If you tap or swipe over the cover, are you also see some offers more sponsors and you can support our show by supporting them? We hope you will, if you like She heard we would love it if you could give us a five star rating and don't forget to tell your friends how to subscribe. There's another you can support us go over to one

red com. Slash surveying answer few questions, don't forget to tell us what business war stories you like here. We should say something about the conversations in this episode and we can't know exactly what was said at the time, but this dialogue is based on our best research if like to learn more about Patagonia and the north face. We would have recommend let my people go surfing by Yvon Chouinard green, the north face by half club, I'm your house, David Brown, trysting Donovan, wrote this story. Karen low is our senior producer and editor at it didn't produced by eminent from sound designed by Kyle Random, our executive producers are Jenny, Lauer, Batman and martial looming created by or Non Lopez for wondering islands

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