REI EXITS EXPERIENCES BUSINESS

REI Co-op has closed its Experiences business, which includes adventure travel, day tours, and classes. President and CEO Eric Artz shared a message with the employees of 86-year-old specialty outdoor apparel and equipment: “…after a thorough review and careful consideration, I have made the difficult decision to exit the Experiences business altogether, effective this week. The reality is a thriving co-op requires a sustainable economic model that is capable of investing at the appropriate level to fully fund our most critical strategic ambitions. While we are still in the process of finalizing 2024 results, our preliminary financials indicate we will be close to breakeven for both Pre-Dividend Operating Income (PDOI) and Free Cash Flow (FCF).”

Artz went on to say the company had seen significant improvement over 2023, driven by its focus on increasing full-price sales mix and gross margin, effectively managing inventory to improve in-stocks and inventory turns, and carefully managing costs to optimize spending. Yet the Experiences division—despite operating for 40 years, serving nearly one million people, including 40,000 customers in 2024—less than 0.4% of all co-op customers—cost significantly more to run than it brought in.

Commitment to People

“While this is the right decision for the future of our business, it will have a significant impact on people,” said Artz. “Specifically, the 180 full-time employees and 248 part-time guides in our Experiences division whose jobs will be eliminated as we close this business. We have some of the best Experiences guides and staff in the business and are committed to making this transition as smooth as possible.”

Focusing on the Core

While the company’s leadership believes REI has a role in outdoor education and expertise, it also feels a need to reexamine and rework how it delivers classes and education that are relevant to its customers while staying aligned with its mission and remaining financially viable. To that end, the company is funding a small team to innovate and test in this area in 2025.

The company will be focusing its resources in areas such as:

• Driving growth in priority activities (Camp and Backpack, Run, and Hike and Outside Life) in service of its core customers and best members.
• Investing in tools to help more effectively manage inventory, which will improve sales, profitability, and liquidity by driving improvements in in-stocks, locally relevant assortments, and inventory flow.
• Continuing to enhance the customer experience online and in stores with investments in areas including personalization and visual merchandising.

REI has 24 million members with stores across the country, as well as REI.com, REI Outlet, and  the REI shopping app. Everyone is welcome to shop REI, but members who join the co-op enjoy a range of benefits.