REI, the Seattle-based outdoor member co-op, announced (here) on Wednesday, January 8, 2025, that it’s closing down its money-losing “Experiences” division, which includes classes and guided tours.
“The Co-Op,” as REI is known, said this business decision will eliminate 180 full-time employees and 248 part-time guide positions. The company, which reported a $165 million loss in 2022 and $311 million loss in 2023 (see story here), expects to be “close to breakeven” in 2024 before paying dividends.
REI is owned by its 25.4-million customers, who receive dividend coupons equivalent to 10% of their purchases they can use to get discounts on purchases. It was founded in Seattle in 1938 by a small group of climbers to import gear they couldn’t get locally (see history here). I joined REI when it had a tiny store at Seattle’s 6th and Pine (photo below), which I remember shopping at.
Over many years, the Co-Op grew into a retail behemoth. Maybe it got too big, and shifted too far from its climbing roots. Mass retailing is a risky business, vulnerable to fickle consumers, and giant retailers come and go (think of Sears, K-Mart, and mall chains like Bed, Bath, and Beyond).
In time, control of REI was wrested from its members by bean counters (see “Governance” in Wikipedia article here), and now it’s just another discounter, albeit focused on outdoor sports. Sure, they grew to 15,000 employees (many part-time) and $3.8 billion of sales; but will that mean anything if REI goes the way of K-Mart?
