In a LinkedIn post, Patagonia CEO Ryan Gellert acknowledged that while the brand remains profitable, it is still “vulnerable” to the economic headwinds affecting many companies in the industry.
He highlighted that significant internal changes are on the horizon, and wrote: “Meeting our own standards requires embracing change and focus, and this week begins some major internal changes that are critical for our success in the near term and foundationally important for our next 50 years.”
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Gellert emphasised that these changes will also ensure a more connected and consistent customer experience, remove some of the barriers that hinder productivity, and support a more vibrant company culture.
In addition to this, he mentioned that Patagonia’s Ventura headquarters will re-focus on three key areas: building the best product, creating authentic connections through storytelling, and impact through partnerships and responsible business practices.
A Patagonia spokesperson reiterated the brand’s priorities and told Just Style that Patagonia is focusing teams on product, storytelling and impact, and the reorganised structure reflects those priorities, adding that unfortunately, it resulted in the loss of 41 employees, representing 1% of the workforce.
According to GlobalData’s retail analyst Neil Saunders, the layoffs at Patagonia are a sign of the times in which demand has slowed, competition has become more intense, and profit has thinned down.
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By GlobalDataHe believes Patagonia is “prudent” to take tough decisions now so that it can streamline its business and keep it viable.
Commenting on the outdoor fashion brand’s restructuring, he notes that it does not signal any “dramatic change” in various ethical and environmental stances Patagonia takes which he views as “at the core of the business and will not shift.”
He concluded: “This is more about changing how the company operates than changing what it stands for.”
