It's all sunshine and empty beaches when I visit Cardigan, in West Wales, to meet David and Clare Hieatt, the husband-and-wife team behind the cult outdoors and sports clothing company Howies.

Seven years ago, they left highly paid advertising jobs in London to create a company that sells surfer-cool gear that has the lowest possible impact on the environment. Now, their indie company, which features regularly in lists of Britain's coolest, is part of the American clothing giant Timberland.

You could call it “Pret A Manger syndrome” - idealistic entrepreneurs set up an ethical company, pour in all their time, cash and energy, but ultimately need the funds and backing of big business. Can they sustain the ethical dream or does it turn into a nightmare? Is it selling out or selling in?

The brand that David, 42, and Clare, 40, created quickly won big plaudits. Its trademark subersive T-shirts (the latest of which reads “No I'm Not on F***king Facebook” and costs £20) scooped some of the clothing industry's most coveted prizes. But while Howies was a hit with outdoorsy types and the eco-minded, the Hieatts still kept having to pour in money, twice remortgaging their home. And, as well as trying to grow the company, they were also raising two daughters: Stella, 8, and Tessa, 5.

A year ago, for an undisclosed sum, they sold to Timberland, the US owned outdoor lifestyle brand with 750 retail locations worldwide, which prides itself on its eco-friendly credentials. Last September, an optimistic David declared: “They asked us just to be brilliant at being Howies. It's great. We call them the bank of Timberland.” Still running the business; the condition of sale was that they maintain “full creative control”.

It enabled them to open a shop in Carnaby Street, Central London, with another in Bristol, opening in July, instead of relying on online sales and supplying retailers. Sales have rocketed, going up over 20 per cent annually for the past two years, with predictions for a 40 per cent rise in 2008. But today the Hieatts seem conflicted about their decision and frustrated that Timberland isn't investing as much money in the business as they would like. The truth is, David says, nobody loves Howies like they do.

Is it possible to retain the emotional detachment needed to run an eco-friendly business from an isolated spot in Wales when you've jumped into bed with an American giant? That's an even taller order when you are married to your business partner. Perhaps the Hieatts are victims of their own success: after all, this tiny clothes company has earned disproportionate brand recognition.

No hippy idyll - it's been a hard slog

I had heard stories about David canoeing to work and about how they are both so laid-back that they shut up shop on sunny days to go to the beach with their staff. But the couple I meet look serious and slightly stressed. The Howies mail-order catalogue is full of carefree twenty-somethings, frolicking in the great outdoors, clad in functional but stylish clothing, but behind the scenes it has been a slog. When their first four T-shirts were printed in 1995, Clare was working as a copywriter for the Body Shop and had been influenced by Anita Roddick's concept of “good business”. David worked in advertising. It took six years of hard graft, running the business from their living room, before they received their first pay cheque.

Clare admits that there have been moments of doubting whether they could achieve what they'd set out to do. “David used to talk about becoming the best brand in the world, rivalling Nike and adidas. I'd sometimes think, ‘What on earth are we doing?'” After six years of holding down day jobs, while running the business from their home, Stella was born and they sold up and moved to Wales.

With the rising tide of green awareness, Howies has found favour with people who like their clothes sourced carefully. The cotton is organic - and has been since 2001. They use natural dyes where possible - and 1 per cent of Howies' annual turnover, which was estimated at just under £4 million last year, is given to social and environmental charity work. The original customer was a surfer, a skateboarder or a mountain biker, who liked the clothes because they did the job, keeping you warm and dry, protected from the elements. “We also appeal to what we call big-city defectors,” says David. “Not just people already living the outdoor lifestyle, but people who aspire to it; people who live it at weekends.”

Both David and Clare speak with lilting Welsh accents - they grew up in the same village in South Wales - and look far younger than their years. In fact, they're a good poster for Howies: wholesome but cool. Clare is blonde and slim, in skinny jeans and trainers, while David looks sporty. He spent his teenage years on a skateboard, and they still go mountain biking at weekends.

We meet at the Howies HQ. There's a ramshackle office of 26 employees, and the warehouse where T-shirts are printed, and where the designers are working on the Howies catalogue.

For the last one, clothes were sent off to friends in California and South Africa. “We needed sunshine,” David explains. “Every year we have the same problem. We have to shoot our summer catalogue in November and the weather here is terrible.” They were determined that the pursuit of a summer glow wouldn't lead to the catalogue clocking up a giant carbon footprint. Their friends received instructions, along with the clothes, to take pictures and send them back. The result looks professional even though most of the models and photographers are amateurs.

Applying “deathbed test” to decisions

To make decisions, including the Timberland one, they rely on the “deathbed test” as a way of checking that something fits with their principles. They ask themselves what they would say on their deathbed about the decision. It wasn't easy, David says, but it was logical: “To grow, you need investment; any small company knows that. If you believe in your business and you want to get it to a certain scale, you need help.”

The only problem appears to be Timberland's financial situation. Last year it bought a number of brands, including the American skate shoe company I-Path. The implication is that this has left the company overstretched. “Timberland is having a hard time right now,” says David. “My challenge to Timberland has been that if you have bought the car, you have to be prepared to put petrol in it.”

It strikes me that they are both uneasy about selling out, although neither will admit it. David recently rang up one of his heroes, Yvon Chouinard, the man who set up the eco-clothing company Patagonia, to ask how he has managed to keep control of his company. His answer was 50 years' hard work, which makes David realise how far Howies has to go.

That they choose to be honest about their concerns is typical of how Howies does business. Like other ethical businesses, such as the smoothie drinks company Innocent, it likes to let customers know where it's at. On the blog (howies.co.uk), you can read all about what's going on in the office, new staff and future plans. “We probably tell our customers too much, but it's nice if you can feel human emotion towards a company,” says Clare.

There's no doubt that it's also an effective marketing strategy. Between the two of them, their creative marketing skills are impeccable. When I suggest this, Clare interrupts. “But we've got little else. We're good at developing the brand, but hopeless at the finances.”

Playing good cop, bad cop

Though they are perfectly matched as business partners, their skills differ. “Clare's nice and I'm not,” laughs David. “We play good cop, bad cop.” Clare insists that David's the passion, but that he can be a bit irrational, while she is more logical. Amazingly, they claim not to row about the direction of the business, always agreeing on big decisions. Although, Clare admits, it can be tiring taking your work home. “There's no end of the day,” she says. “We carry on discussing Howies around the dinner table.”

They are very keen on the concept of low-impact business. What they mean by this, says David, is that the processes in which the clothes are made, including dyes, fabric and transport, are doing as little damage as possible. I ask how they square this idea with their clothes being made in factories in China and Turkey. David has visited several to check that the standards are up to scratch, but as a small company, sometimes putting in orders for only a couple of hundred items, he says, you can't go in with a strict agenda. “We have to be grateful if a factory accepts us at all,” he adds.

Their solution has been to use the same factories as companies that they trust, such as Marks & Spencer and Ralph Lauren, which have already conducted audits of each factory to check working conditions. Howies piggy-backs on their ethical credentials, without having to fork out for audits themselves.

But they are constantly having to reassess, to work out if they could do things better. To keep a green and ethically clean clothes company afloat is a struggle, David and Clare agree, but there are rewards. When they lived in London, spending their weekends in Wales, they would dread the Sunday night drive home, “with that awful feeling that you haven't done your homework,” says David, grimacing.

These days, come six o'clock on a Sunday evening, you'll find them heading down to the beach. Just as visiting friends pile back into their cars for the long journey to London, David and Clare get a chance to enjoy the fact that they're not going anywhere.

Selling out to big business

The Body Shop

The high-street chain founded on an ethical basisby Anita Roddick shocked followers when it was sold to L'Oréal in 2006. According to Ethical Consumer website, L'Oréal has been criticised by environmental campaigners for including pollutants and chemicals in its products. Despite the negative impact on its reputation, the Body Shop has retained its principles, and acts as a separate entity within L'Oréal.

Green & Black's

Set up in 1991 by Craig Sams, the founder of Whole Earth, a chain of organic, carbon-neutral and ethical food stores, Green & Black's was created following similar principles. The chocolate company earned the UK's first Fairtrade mark later that year. Three years ago it was bought out by Cadbury Schweppes. G&B's claimed that the sale was vital for expansion. Since the takeover, the company has dropped from third to twelfth in Ethical Consumer's league table.

Seeds of Change

Howard Shapiro, concerned about intensive-farming methods, set up a small seed company in 1989, later expanding to sell a range of organic foods. In 1999, it was bought by Mars, a company that sources 90 per cent of its cocoa from the Ivory Coast, where according to The Good Shopping Guide, it is hard to ensure that cocoa is “slavery free”. Shapiro defended his actions, saying: “Mars is interested in providing what consumers want. If that's organic food, then Mars wants to be able to satisfy that demand.”

Rachel's Organic

The first organic farm in Britain, certified in 1952, was originally a family business making organic yoghurt, butter and cream. Rachel's Organic was sold in 2003 to the American conglomerate Dean Foods, which has been criticised for using industrial-sized farms, which allegedly do not meet organic standards.

HARRIET ADDISON

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