Yvon Chouinard Gives Away the Store
“I could die tomorrow, and the company is going to continue doing the right thing for the next 50 years.”
Here are today’s highlights:
“Seated privacy” is the latest buzz term in office design.
California has sued Amazon over its treatment of third-party sellers.
Inflation hit 13 percent in Phoenix last month.
Fred Franzia, creator of “Two Buck Chuck,” has passed away.
THE 21 HATS PODCAST: DASHBOARD
What type of entrepreneur are you? On Monday, we published my conversation with Ami Kassar, who talked about his realization that there are different entrepreneurial personality types. As he explained, he’s developed a survey that can help you understand your own entrepreneurial instincts, including your need for control and your comfort with risk. Wanna take the survey? TAKE THE SURVEY
Yvon Chouinard decides to give away the store: “A half century after founding the outdoor apparel maker Patagonia, Yvon Chouinard, the eccentric rock climber who became a reluctant billionaire with his unconventional spin on capitalism, has given the company away. Rather than selling the company or taking it public, Mr. Chouinard, his wife and two adult children have transferred their ownership of Patagonia, valued at about $3 billion, to a specially designed trust and a nonprofit organization. They were created to preserve the company’s independence and ensure that all of its profits — some $100 million a year — are used to combat climate change and protect undeveloped land around the globe.”
“Patagonia will continue to operate as a private, for-profit corporation based in Ventura, Calif., selling more than $1 billion worth of jackets, hats, and ski pants each year. But the Chouinards, who controlled Patagonia until last month, no longer own the company.”
“In August, the family irrevocably transferred all the company’s voting stock, equivalent to 2 percent of the overall shares, into a newly established entity known as the Patagonia Purpose Trust.”
“The Chouinards then donated the other 98 percent of Patagonia, its common shares, to a newly established nonprofit organization called the Holdfast Collective, which will now be the recipient of all the company’s profits and use the funds to combat climate change.”
“‘I didn’t know what to do with the company because I didn’t ever want a company,’ he said from his home in Jackson, Wyo. ‘I didn’t want to be a businessman. Now I could die tomorrow and the company is going to continue doing the right thing for the next 50 years, and I don’t have to be around.’” READ MORE
More companies are choosing to list salaries in job descriptions even when it’s not required: “About 19 percent of companies surveyed by consulting company Willis Towers Watson are planning on giving pay range details in job listings and another 43 percent are considering it, the research showed. Some 17 percent of companies already provide the information across U.S. locations that don’t have legal requirements to do so.”
“Pay transparency is seen as being particularly important for women, who are often already paid less and would benefit more from information that could help them bargain for a higher wage.”
“The pay gap for women has been stalled for more than a decade at about 83 percent of what men earn, according to U.S. Census figures.”
“California last month joined Colorado, New York City, New York State and Washington state in passing laws that will require companies to list salary ranges for job in those states.” READ MORE
Cubicles are making something of a comeback: “Lots of people always hated the ‘open’ office layout designed to foster collaboration. There’s nowhere to hang your stuff, nowhere to have a sensitive conversation and nowhere to focus without overhearing colleagues’ blabbering. Plus, several studies indicate that the supposed benefits of togetherness and transparency are overrated. The privacy many got used to while working from home only intensified the loathing—as did the ‘hot’ desk system businesses adopted for hybrid employees to drop into reopened office buildings. You didn’t have enough personal space before? Let’s try taking away your assigned seat.”
“‘People don’t like hot-desking,’ says Tony Malkin, CEO of the Empire State Realty Trust, which owns and operates the Empire State Building and other commercial properties. ‘It was an interesting experiment whose time has passed.’”
“‘Seated privacy’ is the latest buzzy term in office design, says Kristi Buchler, principal at Interior Architects, which helps companies plan workspaces. Many new cubicles in formerly open setups feature low walls topped with glass, giving workers a sense of solitude when in their chairs, she says.”
“‘But I can still pop my head up and easily go, Oh, my colleague just got here. Great! I had a question for them.’” READ MORE
California has sued Amazon over its treatment of third-party sellers: “Attorney General Rob Bonta said his office had filed a lawsuit in San Francisco Superior Court seeking to halt Amazon policies he said prevent merchants from offering lower prices through competitors’ websites. The suit is the result of an investigation that began in early 2020, Mr. Bonta said. The suit asks the court to block Amazon from continuing those policies and to appoint a monitor to ensure the company’s compliance, according to a copy viewed by The Wall Street Journal. It also seeks unspecified damages for harm to the state economy and $2,500 for each violation of the state’s civil and professional code proved at trial.”
“Third-party merchants that offer their products on Amazon’s marketplace make up the majority of the company’s product sales, according to the complaint.”
“California alleges that Amazon requires [merchants] to sign agreements that penalize them for offering their products at cheaper prices on competing sites such as Walmart or Target.”
“Those who don’t comply may get pushed lower in Amazon’s search results or be disqualified from being featured in the site’s ‘buy box,’ the suit alleges, and may even be suspended or removed.” READ MORE
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A tentative deal has been reached averting a national railroad strike: “The White House said Thursday it had reached a tentative agreement to avoid a potential railway strike that threatened to shut down a crucial vein of the U.S. economy. President Biden said the tentative deal ‘is an important win for our economy and the American people.’ He credited the unions and rail companies ‘for negotiating in good faith and reaching a tentative agreement that will keep our critical rail system working and avoid disruption of our economy.’”
“Stopping America’s 7,000 long-distance freight trains could reduce economic output by more than $2 billion every day, the AAR said in a recent report.” READ MORE
Inflation varies considerably from city to city—just ask Phoenix: “Inflation soared to 13 percent in Phoenix last month, a record for any US city in data going back 20 years and more than twice as high as San Francisco. Other cities across the South and Southwest saw double-digit increases in consumer prices, with the Atlanta metropolitan area posting annual inflation of 11.7 percent and Miami reaching 10.7 percent, according to Bureau of Labor Statistics data. Overall inflation was resurgent in August, dashing hopes of a nascent slowdown even as gasoline prices declined.”
“In San Francisco, consumer prices rose 5.7 percent in the 12 months through August, while in Los Angeles the rate was 7.6 percent. In the New York city metro area, prices rose 6.6 percent, a slight acceleration from 6.5 percent in July.”
“Meanwhile, high housing costs are dogging the Sun Belt, where a shortage of apartments and houses and an inflow of investors have been driving up rents.”
“Shelter costs in metropolitan Phoenix climbed 19 percent in August from the previous year, compared with a 6.2 percent gain nationwide.” READ MORE
A CONVERSATION ABOUT RECESSION
Is recession really looming? How would it affect my business? What can I do to prepare? Next week I will lead a virtual conversation with John Burns, founder of John Burns Real Estate Consulting in which we’ll discuss these questions and more. The Small Giants Community is hosting this free event on September 21st. LEARN MORE AND REGISTER HERE
California’s black market in marijuana is still booming: “The continuing success of illegal cannabis shops and the struggles of legal ones in the heart of L.A.’s Eastside offer a stark illustration of how California’s legalization of marijuana has gone wrong. Far from being eradicated, the black market is booming in plain sight, luring customers away from above-board retailers with their cheaper — if untested and unregulated — product.”
“Some of the dozen or so illegal dispensaries operating on any given day along the boulevard advertise openly, with signage on the property and Yelp pages.”
“When it comes to charging people for crimes related to illegal dispensaries, ‘there’s this attitude: It’s just cannabis, we’re not going to incarcerate people for that,’ Fuchs said. ‘Well, you’re just telling the legal market, Good luck.’”
“Illegal dispensaries, meanwhile, are making money ‘hand over fist,’ Fuchs said.” READ MORE
Fred Franzia, founder and CEO of Bronco Wine Company: “Franzia championed affordable wine for the masses and frequently criticized his higher-priced competitors. ‘Who says we're lower priced? We're the best price. The others, I think, are overpriced,’ Franzia told the San Francisco Chronicle in 2009. Perhaps his most notable contribution to American culture is Charles Shaw, a.k.a. ‘Two Buck Chuck.’ The wine, sold exclusively at Trader Joe's since 2002, earned that nickname for its affordable price that undercuts its higher-priced competitors. ‘Take that and shove it, Napa,’ he once said in an interview.”
“Bronco Wine is one of America's biggest wine companies, with a portfolio of more than 100 brands spanning from wine, spirits and ready-to-drink cocktails.”
“Wine Spectator estimates that it's the 13th largest wine marketer in the U.S., moving more than 3.4 million cases last year.” READ MORE
THE 21 HATS PODCAST
Another gift brought to you by corporate America: This week, in light of reports that half of the U.S. workforce has “quietly quit,” Shawn Busse, Paul Downs, and William Vanderbloemen talk about the latest rage: Is quiet quitting something new? Is it just a media creation? Have Shawn, Paul, and William experienced it in their businesses? And who’s to blame? Plus, the three owners discuss how they hire for engagement and how they’ve changed their hiring processes in response to the pandemic and the labor shortage. For example, Paul explains why, in this brave new world, he continues to flip conventional wisdom on its head: Instead of hiring slow and firing fast, he’s been hiring fast and firing slow. And he says it’s working.
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