When Mary Beth Laughton turned CEO of REI this 12 months, one of many first issues she did was aimed toward bettering relations with the workers of the struggling open air gear retailer: She apologized for REI’s endorsement in January of President Donald Trump’s candidate for Secretary of the Inside, Doug Burgum.
“Let me be clear, signing that letter was a mistake,” she mentioned, referring to a letter her predecessor Eric Artz signed, together with various different outside centered firms, supporting Burgum’s nomination.
As detailed in 2024 in a Fortune examination, REI (“Recreational Equipment Inc”) workers, referred to as “Green Vests” for his or her trademark in-store attire, had been more and more sad lately with what they noticed because the rise of a company tradition that undermined the values and objective of the beloved co-op. (As a co-op, REI pays members a dividend, basically a retailer credit score equal to 10% of what they spent on full-price objects the 12 months earlier than. As well as, REI has traditionally given again quantities equal to about 70% of income annually within the type of dividends, worker bonuses, and investments within the outside business.)
Repairing relations with these front-line staff was key for Laughton, particularly because the model struggled: In 2024, REI gross sales fell 6% to $3.53 billion, following declines within the two prior years. The brand new CEO advised Fortune in Might 2025 that she wished to return to “focusing on our roots,” and he or she praised the Inexperienced Vests. However within the final week, Laughton and her govt staff have made strikes that would complicate these efforts and revive tensions.
Earlier this week, REI introduced that it was closing three shops in 2026 together with its huge, bustling flagship in New York’s SoHo district, in addition to shops in Boston and Paramus, N.J. And in a letter to workers despatched final week earlier than the shop closings, Laughton outlined a three-year strategic plan that she referred to as “Peak 28: Ascending Together,” a reference to objectives to hit by 2028 and to REI’s origins as a mountaineering provides firm. Laughton warned workers that to develop gross sales the model must make “tough choices” with out specifying what these selections may be, in accordance with Bicycle Retailer, a commerce publication. (The one change Laughton specified was that REI would overhaul its buyer loyalty program.)
She went on to say that she and the REI workforce ought to “challenge ourselves to be not just the best co-op, but also the best retailer.”
Relations between the inexperienced vests and the corporate have been strained for a while. Certainly, after the pandemic—which initially decimated gross sales however then led to a surge in enterprise that overwhelmed REI’s provide chain and operations—Artz made strikes that angered many workers.
To stabilize the corporate, he carried out extra centralized decision-making, carried out a expensive overhaul of REI’s e-commerce, and employed a raft of executives from massive nationwide retailers—leaving many Inexperienced Vests, and business observers, to wonder if REI would lose its soul by working like big-box rivals reminiscent of Cabela’s, Dick’s Sporting Items, or Walmart. Artz and different executives defended the hiring of executives from different retailers—a change from its prior deal with inside recruitment—and blamed the corporate’s monetary issues on REI’s excessive prices from member dividends and the donations it makes.
Throughout Artz’s tenure, efforts to unionize shops proliferated: The New York Metropolis retailer was the primary to unionize, in 2022, and is now one among 11 such REI places, together with Boston.
Like Artz earlier than her, Laughton has argued that REI must be aggressive with rivals to outlive, and in her letter she warned workers towards falling into the mindset of nostalgia. “This plan is not about getting back to what the co-op used to be,” she wrote. “It’s about climbing the challenging peak that’s in front of us, putting the co-op on more solid footing.”
Whereas REI didn’t say precisely why it was closing the shops, its assertion in regards to the matter sounded a word just like Laughton’s letter, framing the choice as mandatory for the corporate’s well being: “Exiting stores at the time of lease renewal that do not meet these considerations is a responsible and prudent part of running a retail business.”
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