Galbraith leaving Patagonia sparks questions -- SNEWS® has answers

News of Mark Galbraith, along with several others in management positions, leaving Patagonia started a chain of emails and phone calls to SNEWS® central wondering what was going down. Could things be that bad at Patagonia? Was a shake-up in the works? Where was Galbraith going? We began to dig, and what we unearthed does make sense of Galbraith's departure, and then some.
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News of Mark Galbraith, along with several others in management positions, leaving Patagonia started a chain of emails and phone calls to SNEWS® Central wondering what was going down.

Could things be that bad at Patagonia? Was a shake-up in the works? Where was Galbraith going?

We began to dig, and what we unearthed does make sense of Galbraith's departure ... and then some. Interviews with numerous insiders, friends of insiders, and friends and family of insiders began to reveal that a very new company was in the making, led by a number of power-players in the outdoor industry -- including many current and former Patagonia and Nike employees.

In the paragraphs to follow, we'll do our best to present a picture -- some fact, some speculation -- to shed a light on what is to come.

SNEWS® Fact: Patagonia is NOT in trouble! While the announced departure of Galbraith certainly stirred things up in Ventura, and quite a few Patagonia staff were walking around in a somewhat shell-shocked state for a few hours, challenge creates opportunity. In the long-run, this is nothing but good.

Galbraith will absolutely be missed. As Michael Crooke, president of Patagonia told us, "Mark was brilliant in his craft, and the innovations he brought the Patagonia product line are too numerous to list." Indeed, Galbraith was a creative force at Patagonia, and his knowledge of design, textiles, sourcing and construction technology has helped the company remain a market leader.

However, Patagonia has many talented staff members, and we suspect (in fact we know) that there will be folks stepping up to fill the void. Though Galbraith will never be replaced by even one person, there will be a restructuring that will allow a number of Patagonia staffers to be able to now place their own stamp on furthering innovation and on the continued development of product and fabric and design technologies at the company.

SNEWS® Fact: Galbraith, along with Adrienne Moser and Hal Arneson, are leaving Patagonia to begin work as executives at a Portland, Ore.-based start-up run by Eric Reynolds and Chris Van Dyke. Galbraith will likely be in charge of product design, sourcing, and technology development in a way few of us have ever seen. Moser will become the company's COO, we've heard. Arneson will likely become the director of the catalog and Internet portion of the company. Also currently working for the company are Jill Zilligen, formerly of Patagonia, and Ian Yolles who worked for Patagonia eons ago and more recently with Nike. Yolles will lead marketing and PR for the company. The search firm being used by the company was founded by a very talented group, also with roots that lead back to Nike.

SNEWS® Fact: In the course of our interviews, we heard that Galbraith was going to work for a company named Under The Wire. It didn't take us too long to cull state databases, along with applying a little imagination, to find that a company named UTW LLC was registered to Eric Reynolds in Colorado on Sept. 20, 2004. That would explain some of the conversations we had with folks last year who told us Reynolds was "up to something really big that could really shake things up." We also found that UTW Inc. was registered to Chris Van Dyke in Oregon on March 3, 2005. Van Dyke is listed as the company president.

SNEWS® Speculation: What is UTW? One working name that has been bandied about is Under The Wire. However, another name, mentioned separately to SNEWS® by several individuals who would not know each other, but who would know about the company, is Unfuck the World. While that name is, well, at least catchy, it does, we believe, speak to the heart and soul of the folks who are running and who are now joining this company. Each has a strong entrepreneurial passion, fueled by a deep desire to run and be part of a business that impacts social causes, is environmentally responsible, and is profitable because the business, "implements creative philanthropic capitalistic business practices…(that) change the world." That last quote is pulled from a job description the company posted on a search firm's website that is doing work for UTW.

SNEWS® Fact: Who are Chris Van Dyke and Eric Reynolds? Van Dyke, the son of Dick Van Dyke and formerly a district attorney in Salem, Ore., was most recently running his own company, Van Dyke and Zilligen, with Jill Zilligen (also formerly from Patagonia), which consulted with companies to help them become industry leaders by "strengthening their brands by focusing on values-based customer relationships and business sustainability." Prior to that he was vice president of marketing and product development at Patagonia and, before that, global brand development and marketing manager at Nike. Eric Reynolds, a founder of Marmot, was the president of Sweetwater from 1993 until the company was sold to Cascade Designs in 1997. Since then, he has served as a consultant working with companies such as Event.

SNEWS® Fact: Beyond the corporate entity registered as UTW, SNEWS® has learned that Reynolds also trademarked the name Webfront on February 14, 2005, as an official service mark with the U.S. Patent and Trademark Office. Under the goods and services description, it says, "Computerized on-line retail store and mail order services that integrate Internet and website content into retail store locations in the field of consumer goods."

SNEWS® Speculation: While we do know that this new business venture is a retail one that involves physical store locations, an Internet presence, and a catalog component, the hiring of Galbraith, combined with the various bits and pieces of information we have culled together from many separate interviews, indicate that this is something much more. We are absolutely certain that this business will have its own brand -- likely an apparel one. There will be store locations around the country, probably as many as fifty, perhaps more. The stores will be located close to existing retail business locations like REI, EMS, etc. to draw from the existing traffic. The model will be very much like Timbuk2 -- customers will be able to set up accounts, order products the way they want them, with the features they want, and have those products delivered directly to their door. We would suspect that this retail entity will also be willing to work with and sell other manufacturers' brands, as long as those manufacturers offer similar on-demand ordering capability and operate their businesses in a social and environmentally sustainable manner.

SNEWS® Fact: Though it is impossible to say just how much this business will be giving toward social and environmental causes, we are absolutely certain that giving a percent of each purchase a consumer makes to social and environmental causes will be the UTW's raison d'etre -- think www.onepercentfortheplanet.org. One Percent for The Planet is a nonprofit company that was founded by Yvon Chouinard, and operated by Jill Zilligen, to demonstrate that good businesses can be profitable and good environmental and social stewards at the same time.

Van Dyke's and Zilligen's company website states, "The measure of a company's greatness is found not only in the strength of its balance sheet and the innovation of products, but also in its ability to affect positively the lives of its customers."

The company values statement goes on to say, "This leadership, based upon a 'values-based' business philosophy, is rewarded by consumer brand loyalty that goes far beyond that created in a simple cash transaction. Put another way, doing the right thing is great for business."

We have little doubt that any company that Van Dyke, Zilligen and others are involved in as owners will embrace the same values and value statements as part of the corporate culture, mission statement, and corporate operating mandate.

SNEWS® Speculation: How much private and VC money is currently involved is unknown, but it has to be significant. In short order, the company is going to have an annual salary burn rate in the millions -- unless the company execs, programmers, and other key staff are simply donating their time, and we doubt that. Word on the street has it that a first round of funding is being pursued. But here again, any VC money or investor is going to have to buy off on the fact that this business will be run in an entirely new manner and that social and environmental responsibility will always take a front seat and not be pushed aside in the pursuit of profits.

SNEWS® View: On the surface, this is all very exciting to watch. IF this team can pull off the business we believe they are in the process of developing (and if they can't we'd be hard-pressed to imagine anyone else who could), it will be revolutionary in concept and execution, and it will have the potential to shake up the current retail and manufacturing marketplace. It is an audacious plan. And it is being run by industry leaders who think audacious plans are merely a starting point to being successful. Best of all, Van Dyke and team represent a group of thinkers and industry rebels that will measure success in terms of both profit and how much the business can and will be able to do to affect change in the social and environmental landscape. This is really going to be fun to watch!

SNEWS® (www.snewsnet.com) is a subscription-based, insider trade news service covering the outdoor and fitness industries. We are allowing public access to this article as a benefit to the industry. If you are not already a subscriber and like what you are reading, we encourage you to consider becoming a subscriber. Just click here www.snewsnet.com/subscribe. Also visit our partner website, www.GearTrends.com, for free product and brand information.

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