When Mary Beth Laughton became CEO of REI this year, one of many first issues she did was aimed toward bettering relations with the workers of the struggling outside 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 numerous different outside targeted firms, supporting Burgum’s nomination.
As detailed in 2024 in a Fortune examination, REI (“Leisure Tools Inc”) staff, generally known as “Inexperienced Vests” for his or her trademark in-store attire, had been more and more sad in recent times with what they noticed because the rise of a company tradition that undermined the values and goal of the beloved co-op. (As a co-op, REI pays members a dividend, primarily a retailer credit score equal to 10% of what they spent on full-price gadgets the yr 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 trade.)
Repairing relations with these front-line employees 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 informed Fortune in Might 2025 that she needed to return to “specializing in our roots,” and he or she praised the Inexperienced Vests. However within the final week, Laughton and her government workforce 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 employees sent last week earlier than the shop closings, Laughton outlined a three-year strategic plan that she referred to as “Peak 28: Ascending Collectively,” 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 “powerful selections” with out specifying what these selections is likely to 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 “problem ourselves to be not simply the perfect co-op, but in addition the perfect retailer.”
In an announcement following this week’s announcement, the union representing the employees on the New York and Boston shops (the Paramus, N.J. retailer shouldn’t be unionized) hinted that it had been blindsided by the information. It steered that the closings, and the layoffs that can ensue, might jeopardize the progress made this summer time when REI Co-op agreed to start contract negotiations with its 11 unionized shops, on whose behalf the union dropped a federal grievance after the retailer agreed to revive wage will increase.
“We’re searching for extra info to grasp this choice,” the union mentioned in an electronic mail to Fortune, “and we hope that the brand new relationship established this previous summer time between REI and the REI Union will allow each events to safe the absolute best final result for the affected employees.”
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 staff.
To stabilize the corporate, he applied extra centralized decision-making, carried out a pricey overhaul of REI’s e-commerce, and employed a raft of executives from giant nationwide retailers—leaving many Inexperienced Vests, and trade observers, to wonder if REI would lose its soul by working like big-box rivals resembling 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 in all 11 such REI places, together with Boston.
Like Artz earlier than her, Laughton has argued that REI needs to be aggressive with rivals to outlive, and in her letter she warned workers towards falling into the mindset of nostalgia. “This plan shouldn’t be about getting again to what the co-op was,” she wrote. “It’s about climbing the difficult peak that’s in entrance of us, placing the co-op on extra stable footing.”
Whereas REI didn’t say precisely why it was closing the shops, its assertion concerning the matter sounded a word just like Laughton’s letter, framing the choice as obligatory for the corporate’s well being: “Exiting shops on the time of lease renewal that don’t meet these concerns is a accountable and prudent a part of working a retail enterprise.”
