When Patagonia announced on March 13 that it was temporarily closing its 39 stores and e-commerce business in North America because of the coronavirus pandemic, it was one of the first major retailers to take such a drastic step.
The company’s chief executive thought the situation would last about a month.
As it became clear “this was going to be a prolonged thing, we had to think about what our business looks like in the face of COVID-19,” Rose Marcario, the CEO, said in an interview.
Now the retailer that aggressively moved to close before any government shutdowns were announced is being very cautious in deciding how to open up again.
Retailers like Macy’s and Gap, which owns Banana Republic and Old Navy, have begun reopening hundreds of stores as they scramble to recoup lost sales and as states around the country begin to try to return to some semblance of normalcy.
But Patagonia does not anticipate opening any locations for in-store shopping until June at the earliest and it is prepared to wait until the fall or even early winter. Even then, it may decide to limit operations to curbside pickup, which it plans to begin offering at 10 stores on May 20.
“We’re going to be cautious about the way we open up — we’re not going to necessarily follow what the state decrees are,” Marcario said. “There are some areas that aren’t as hard hit, but I don’t think you can assume those places won’t see a surge in cases if people stop social distancing.”
She believes “the shape of retail will change.” People will be more reliant on e-commerce and “the return to walk-in retail will be slow.”
Patagonia has achieved renown in the retail world both for its financial success and its unapologetically progressive stances on issues like climate change and the use of public lands. The privately held brand sells about $1 billion in soft fleeces and camping gear every year while decrying rampant consumerism.
Patagonia is held to a different set of standards than major publicly traded corporations based on its certification as a B Corp by a nonprofit called the B Lab, which legally requires the company to consider the interests of “workers, the community and the environment” as well as shareholders. It also offers on-site child care and lets employees take surf breaks.
The brand’s approach is being tested by the pandemic. Patagonia must balance the future of its business, which it acknowledges could shrink, with the health and financial well-being of its employees.
The brand has long viewed its stores as community-gathering places, where people can buy outdoor gear but also see documentaries, hear talks by environmental activists and get equipment repaired. Since closing, it has tried to connect with its loyal customers online with offerings like yoga sessions and “regenerative home garden classes.”
But the retail industry has been devastated by the pandemic and Patagonia is no exception. Its sales have dropped 50% in North America. Outside of its own stores and website, about half of Patagonia’s business comes from distributing its wares through local outdoor shops near mountains, streams and oceans, and national retail chains like REI and Nordstrom, which have all been badly hit by the crisis.
“Even though we are kind of a beacon in the retail world, we’re not immune and we’re not invincible and this has hit us incredibly hard,” Marcario said. “The challenge that we face now is how do we take care of our employees and our community while all of this is happening in a way that’s true to our values?”
Patagonia started accepting online orders again on April 9 after overhauling its distribution center in Reno, Nev. Workers have their temperatures checked, stagger exits and are often 30 feet apart. On April 20, the company sent an e-mail to customers with the subject line: “Back to Business.”
“We know the distribution center warehouse is the linchpin of our business, because if it’s not working, there are no sales being satisfied to our wholesale and e-commerce channels and our stores can’t get product,” said Todd Soller, head of global logistics and supply planning at Patagonia.
But e-commerce cannot account for all the lost sales, and Patagonia has had to take other measures. Executives have taken pay cuts, which are expected to extend to other employees. Patagonia is furloughing workers, including 80% of its retail staff, for 90 days, though they will keep their health benefits. The company also said it would honor planned paid leave for furloughed employees.
Joy Lewis, Patagonia’s head of retailing for North America, has been helping to envision what the experience of working and shopping in Patagonia’s stores will be like. “Squad scheduling” has been put in place for employees who are shipping items from stores, in which teams of four to six people work together consistently, and if one person gets sick, the whole team will be isolated.
Patagonia has been experimenting with a mobile checkout device to avoid lines at registers, she said. Lewis said shopping by appointment was a possibility to better control the number of people in a store at any given time.
Despite the steep business decline that Patagonia is facing, Marcario believes the brand will ultimately benefit as the pandemic encourages people, particularly younger generations, to “buy things that last.” The crisis has, in some ways, reminded people “of the value of wild and open spaces and clean air and clean water and if we can channel that to some good, all is not lost,” she said.
Even if Patagonia becomes a smaller company as a result of the pandemic, it will keep working “to protect wild places, to vote climate deniers out of office,” she said.
“We were one of the first to shut down. We might be closer to the last to reopen fully — I don’t really care,” Marcario said. “We are doing everything we can to ensure that our employees are taken care of in the best way possible and we’ll make those decisions as we come to them.”