Why is REI Dying? Are the Outdoors Dying too?
I’m not sure if you keep up on the happenings in the outdoor world, but we, Average Flatlanders do, and one of the strange pieces of news recently is the apparent dying on the vine of probably one of the most popular and best outdoor stores REI.
If you’re like me one of the best parts of planning any adventure, from backpacking, a camping trip, to heading to the Great White North … is the ability to have an excuse to head to REI and go buy 3 things you need and 5 more you don’t.
Even in the age of Amazon, REI is still a go-to spot go get specialized gear that is hard to find somewhere else. Sure, you can find little things like this and that at Bass Pro or wherever, but REI carries the brands that we outdoors lovers trust and use.
So what’s happening to REI???!!!
Recently they’ve been losing money and firing people left and right, even closing stores! What the heck??!! Sure we all hear rumblings about the economy, but the outdoors seems as popular as ever, don’t they? I mean it’s hard to find a secluded spot and even go on vacation anymore!
Maybe if you’re like me and spend your life in the outdoors it’s like being boiled slowly like a frog. Maybe people and the culture is more about TikTok and Fast Food than going outdoors, why is REI losing money hand over fist, to the point of doing multiple layoffs and closing stores??
Is it the outdoors that is dying, or just bad management at REI?
You can even go on Reddit and read about people with between 15-25 years of working for REI being given the boot! Things must be bad!
I mean the economy isn’t that bad, so are their margins that bad, did they have bloated expenses and operating costs??!!
The CEO said this …
“Outdoor specialty retail has experienced four quarters of decline—and that trend has been worsening. While we were able to outperform this trend for much of the last year, it caught up to us in Q4 and we now expect conditions to remain very challenging throughout 2024.”
It does make you wonder if it’s just a money-tightening of things or a more fundamental shift in the culture.
“Recent studies indicate that many Americans are spending less time outdoors, which is impacting their overall health. A survey of 12,000 adults and children in the United States found that over half of American adults spend five hours or fewer outside in nature each week. This trend is attributed to increasing use of technology, urbanization, and competing priorities that push nature experiences aside (Yale E360).”
Maybe it’s both? I mean it is a little hard to fathom that it doesn’t have something to do with management. They recently had 3.76 billion in income and failed to make money or break even. Jezz.
“According to The Seattle Times, REI said last year’s loss was largely driven by increases in hourly wages for employees and REI’s commitment to return a portion of its earnings to members. The cash payments to members totaled $200 million last year.” – source
I can sorta of understand that labor costs have something to do with it, that is a major concern for pretty much every business … they whole 200 million of cash payments to members … not buying that one. Sounds like they probably are not managing expenses and inventory very well would be my guess.
I’m still not sure what to think, as far as I can tell being in the outdoors is still hip and trendy and attracts a lot of young folks. But, I do understand that the economy has been contracting a little bit and spending has probably been cooling down, but if REI is having troubles now, I would hate to see it if things get even more dicey!
It’s probably time for REI to get some new leadership in to figure out how they can make it through these “rough” times that appear to be not that rough.
