Internal Analysis Finances

Cost/ Expenses $3.8 million for eco-friendly commitment in 2009 $100k annually on field testing $350k to repair 12k garments/yr = $29 per garment Less than 1% revenues on marketing 1% revenues on environmental causes $200k in kind donations to eco-causes

Vast majority of revenues comes from 3 major product lines Potential to rationalize products in order to enhance inventory management

direct sales have highest margins, but generate the highest % returns Opportunity to improve direct sales channel or focus on retail

Patagonia has been performing extremely well compared to the industry Focus on sustainability and wealthy customers has paid off

Patagonia has been performing extremely well compared to the industry Patagonia was able to protect profits even during recessionary times

Maintaining growth and employee satisfaction comes at a cost Patagonia has some of the lowest sales per employees in its industry

Patagonia maintains 4x below average D/e ratio Increasing debt to average could yield 14M$ in capital to fuel growth

Introduction of recycling program did have a positive impact on sales program enhancement has the potential to fuel top line growth

History showed that New initiative can hurt profitability Need to focus on keeping costs under control