Outdoor retailing behemoth REI Co-op announced on January 8, 2025, that it is exiting its Experiences business, a division that offered adventure travel, day tours, and classes for over 40 years. While Experiences wasn’t well-known for mountain bike trips, it did offer several mountain biking itineraries, including two in Arizona and one in Colorado, according to a recent search.
REI’s struggle for profitability
This decision comes after REI has struggled to maintain profitability in recent years, posting $311 million in losses in 2023 and $164.7 million in losses in 2022.
Eric Artz, REI’s president and CEO, shared in a letter to employees that while the co-op made strides toward financial recovery in 2024, the Experiences business remained unprofitable. Serving just 40,000 people in 2024, less than 0.4% of REI’s customers, the division posted millions of dollars in losses every year, even during its peak in 2019.
“To build a thriving co-op, we need a sustainable economic model that supports our core mission,” wrote Artz. “Unfortunately, the Experiences business, despite its value to many, does not align with this goal.” Artz wrote that they analyzed a plethora of different business strategies to allow Experiences to attain profitability but that none of the models indicated the business could be profitable.
Artz also shared that REI “will be close to break-even for both Pre-Dividend Operating Income (PDOI) and Free Cash Flow (FCF)” in 2024.
428 jobs will be eliminated
The closure will impact 428 employees — 180 full-time and 248 part-time. Full-time employees will continue to receive salaries through March 9, 2025, and severance packages, while part-time staff will remain benefits-eligible through January. The company has committed to supporting employees during the transition with healthcare extensions, outplacement services, and future job opportunities within the co-op.
Artz noted that some full-time employees already split their time between Experiences and working in-store, and those employees “will have a conversation with their store manager later today to learn what options exist for each employee to continue employment in a store capacity based on their employment status and ability to meet the necessary availability standards.”
REI is also reaching out to customers and travel partners to facilitate refunds and resolve outstanding commitments.
REI will refocus on its core strengths, which don’t include cycling
In his letter, Artz emphasized the importance of returning to REI’s roots. They plan to focus on three areas: driving growth in their priority activities, investing in tools to help them effectively manage inventory, and “continuing to enhance the customer experience online and in stores with investments in areas including personalization and visual merchandising.”
Notably, Artz listed REI’s “priority activities” as “Camp and Backpack, Run, and Hike and Outside Life.” Despite investments in cycling generally in recent years, including launching the Co-Op brand of bikes and partnering with Canyon, it appears that Artz still views the cycling demographic as peripheral to REI’s core focus.
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The last few times I've been in there I've found myself wandering around for 30 or 45 minutes just to find someone to ask a question. Employees have at best been polite but confused to be asked a question, with seemingly zero knowledge of the products or the store or anything else, at worst unhelpful and openly irritated to be talking to me. "Uh, I don't know, sounds like you're looking for something specific so you should probably just look it up online." So I don't shop at REI anymore. Seems like a company in a death spiral. Too bad!