The marketing director of Patagonia, Inc. (Patagonia), had been tasked with considering the financial implications of a new initiative that Patagonia planned to launch within six months: Common Threads. It was envisioned as a used-clothing joint venture in which owners of Patagonia clothing could list garments for sale via an eBay-style platform. Patagonia’s leadership was convinced that offering this service to its community of existing clothing owners would reinforce its already-strong brand positioning and potentially be profitable as well. The problem was that the profit idea was all potential thus far–the marketing director could not yet justify the concept on a financial basis. How would the prices of Patagonia’s new clothing and potential used clothing interact with each other? Ultimately, management needed to be shown how Common Threads might create financial value for Patagonia. This case is used in Darden’s first-year Marketing course.
Darden Business Publishing – University of Virginia