REI Co-op Shutters Its Experiences Business After Nearly 40 Years, Lays Off 428 Employees

After nearly 40 years, REI Co-op is shuttering its Experiences business, effective this week. 

With this move, 428 employees — including 180 people in full-time roles and 248 part-time guides — will be laid off.

The outdoor specialty retailer informed its employees of the decision today. 

“We have gone through many iterations and have explored multiple options to keep this business up and running to preserve jobs. We’ve held out as long as possible, but the fact remains that Experiences is an unprofitable business for the co-op, and we must adjust course,” REI chief executive officer Eric Artz said in a note to employees that was shared with FN.

The note stated REI would begin updating customers and partners this week, that customers who are booked on trips or day programs will receive full refunds of “all costs paid to REI” and that it will address any associated non-refundable expenses. As for its travel partners, the note stated the company will begin informing them this week and work with them to terminate existing contracts.  

Ahead of Wednesday’s announcement, Artz spoke with FN and addressed the necessity to shutter Experiences, its adventure travel business, which it launched in 1987. 

“We have 25.1 million card-carrying members at REI. About eight-and-a-half million of those members engaged with us in 2024. The Experiences business served 40,000 customers. It loses more than it brings in,” Artz said. “We’ve subsidized this business for 40 years. It’s certainly been an important element of what we do, but now, based upon where the marketplace is, based upon where we are, we feel like now’s the time to redeploy those losses into the overall core business.”

As for where the REI business is today, Artz said the goal for 2024 was to break even from a pre-dividend profit perspective and work toward profitability and a sustainable, durable economic model.

In the letter to employees, Artz stated the co-op made a “significant improvement” in last year over 2023, which was led by a focus on increasing full-price sales mix and gross margin while managing inventory effectively.

“We’re not announcing results today, but we certainly know enough to be able to say we feel like we’re going to be very close to those pins when the dust settles and the finance teams close the books on the year,” Artz said. “We’re on a journey, we took a big step forward in 2024 and we need to continue to take progressive steps to achieve that durable economic model.”

When it comes to Experiences, the exec said the division has lost the co-op “millions.” That money, Artz explained, will now be focused on driving growth to the retailer’s priority activities (Camp and Backpack, Run, and Hike and Outside). Also, it will be used to help manage inventory more effectively and improve the consumer experience both digitally (dot-com and its app) and in-store through personalization and visual merchandising. 

“In the footwear business, a SKU-intensive business, inventory really matters — right place, right time, right quantity, size runs,” Artz explained. “We’ve made investments in our capability around inventory flow in stocks and technology. We need to make more. Customers are hopefully going to see higher levels of in stock, better flow, better personalized experience with us.”

He continued, “It’s really about building upon the positive signals, signs, opportunities that we see in the marketplace for the customer.”

Also in the message to employees, Artz said there is still a role for REI in outdoor education and expertise, however, he stated the co-op needs to “reexamine and rework” how it delivers classes and education “to ensure they’re relevant” to customers and is aligned to its mission and financially viable. To explore this more, the note stated REI is funding a small team to innovate and test in this area. 

The note also stated that local community-building remains important, and REI will continue to invest in local marketing and consumer engagement. The local marketing team, according to the note, will move back into the marketing organization “to unify similar bodies of customer-facing work.”

Artz believes moving on from Experiences will have a positive impact on REI immediately. “Because we’re reinvesting to build upon the positive and the momentum within the business, it’s really something we expect to matriculate fairly quickly here in the new year,” he said. 

Experiences is the latest exit for REI, but not the only business unit it has exited. In April 2024, the retailer revealed after four years that it was exiting its branded footwear business. 

Artz said no further changes of this magnitude should be expected. 

“This marketplace is moving and changing, so we’re always watching, looking, trying to meet the needs of the customer. I feel really good about how we came through, certainly the second half of ’24, and how we’re meeting the customer today. We want to build upon that,” Artz said. “Are there other shoes to drop that we’re planning on? No. But that being said, it’s been an interesting marketplace over the past five years, so we need to continue to adapt, adjust, be agile, be resilient and keep looking at what’s driving value for the customer.”

This is also not the first time REI has had to make sweeping cuts to its workforce in recent years. For instance, Artz notified employees in January 2024 that it was laying off 357 people across its organization, including 200 corporate employees at its Sumner, Wash., headquarters and 121 in its distribution centers. In a note at the time, Artz stated the cuts were “primarily driven by financial necessity” as REI looked to eliminate redundancies in its organizational structure.

As for those impacted by the shuttering of Experiences, according to REI, every full-time employee affected by these job cuts will receive their regular salary through March 9, while affected part-time employees will be eligible for severance with benefits running through the end of January.

REI added that some shared employees — those who split time between Experiences and stores — will have the option to remain employed in a different role. 

“Any open positions we have across the company, this team is obviously going to get the appropriate attention overall,” Artz said. “Many of them have worked in different parts of the organization before coming to Experiences. They have great passion, expertise. We need to care for them in this moment, understanding the business decision that we needed to make, but over time, they will be eligible for openings and other opportunities at REI as they come up.”

About the Author

Peter Verry is the Senior News and Features Editor for Athletic and Outdoor at Footwear News. He oversees coverage of the two fast-paced and ultracompetitive markets, which includes conducting in-depth interviews with industry leaders and writing stories on sneakers and outdoor shoes. He is a lifelong sneaker addict (and shares his newest purchases via @peterverry on Instagram) and spends most of his free time on a trail. He holds an M.A. in journalism from Hofstra University and can be reached at peter.verry@footwearnews.com.