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“Our hope is to begin a gradual reopening of our stores in the coming months,” says REI CEO Eric Artz in a recently written letter to co-op members. “And we look forward to welcoming you all back into our stores when it’s safe to do so.”

Of course, when that will be is anyone’s guess.

Because of that, Artz penned a letter that dramatically outlines what a behemoth outdoor brand like REI faces at a time when non-essential businesses are mostly closed nationwide. While the brand is keeping their online store lights on, retail storefronts have been closed for over three weeks now. Artz optimistically says in his letter they hope to start small, with curbside pickup of online orders, within the next two months.

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Whether that is a compromise that will satisfy state and local authorities who make decisions about how non-essential businesses can operate is unclear.

What is clear is that tough financial decisions have to be made.

Artz has made them and outlined them all in a transparent and honest letter.

“We’re particularly focused on the next few months because we don’t know exactly when we’ll be able to reopen our stores,” he says. “We believe this will be the most challenging period for our business, and we have to make some immediate decisions that impact REI employees.”

While initially the brand was paying staffers as retail sales hovered in limbo, that changes next week. As of April 15, most retail employees will be furloughed for 90 days, albeit with their health insurance still covered. REI is taking the further step of paying for the employee’s share of benefit premiums to help lessen the financial impact of losing three months—at least—of pay.

The top brass too are taking a haircut.

Artz says he’s not taking a salary for the next six months. Senior execs are taking a 20 percent cut for the same duration, and the board won’t receive fees either. Many staffers at REI HQ, however, are being laid off permanently.

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REI has the economic muscle to weather the coronavirus storm better than most outdoor retail, which is sure to be leaving countless independent shops dead in the water, though some are banking on the support of loyal communities.

You can read Artz’s statement in full, below.

To Our Co-op Community,

Three weeks ago, in the face of the growing outbreak of COVID-19, I shared our decision to temporarily close our 162 retail locations and continue paying all of our retail employees and maintaining their benefits through April 14. As that date approaches, I want to share what we’re doing next.

Our hope is to begin a gradual reopening of our stores in the coming months. We plan to begin with curbside pickup hopefully in the next 45 days. And we look forward to welcoming you all back into our stores when it’s safe to do so. As we did with our decision to temporarily close our stores, we’re going to prioritize the safety of our employees and customers and closely track federal and local guidance.

While we cannot predict the future, we must make informed assumptions and plan accordingly to control what we can. We’re particularly focused on the next few months because we don’t know exactly when we’ll be able to reopen our stores. We believe this will be the most challenging period for our business, and we have to make some immediate decisions that impact REI employees.

Those decisions begin with me and with my senior leadership team. I am forfeiting 100% of my base salary for the next six months, as well as forfeiting all of my incentive eligibility for 2020. Our board of directors is forfeiting their fees for the next six months as well. My entire senior leadership team will be taking a 20% pay reduction for the next six months and will also forfeit all of their incentive eligibility for 2020.

We have also made the decision to begin an unpaid 90-day furlough of the majority of our retail and field employees, beginning on April 15. During this period, all health and welfare benefits will continue as normal for all eligible furloughed employees. In addition, REI will also pay the employee portion of benefit premiums, which means we’ll be covering 100% of eligible employee health and welfare premium costs for all furloughed employees for all 90 days for those employees. All furloughed employees will be eligible to apply for government-funded unemployment pay.

Our limited operations mean we are also making overall reductions of our headquarters workforce. All impacted full-time employees will receive severance along with outplacement services and support.

As the co-op’s CEO, my job is to serve our employees and you, our members. This current crisis is testing us all, but we have worked to make sure our decisions and actions are consistent with the co-op’s mission and values.

To everyone who has reached out with suggestions about ways to help the co-op and our people during this period, I thank you. We have considered every option, and I’m confident the actions we’re taking are the most beneficial for affected employees. The best thing you can do to continue to support the co-op is to continue supporting the co-op—both our business and our community of nonprofit partners across the country. In the coming days, we’ll be sharing more about how to directly support that nonprofit network.

And even with our stores closed, we’re working hard to continue serving your needs. Most orders through REI.com are being shipped for free. Customers who have questions about gear and local outdoor activities can get answers through our digital community, REI Conversations, and Co-op Journal will feature articles that help people find ways to safely get outside during these challenging times.

I am determined and committed to seeing the co-op through this. I am optimistic we will come out of this crisis as strong a community and business as we were coming into it. And I will continue to fight to ensure the co-op will be here for another 82 years to connect our members to a life well lived outdoors.

My best,

Eric Artz
President & CEO, REI Co-op

Photo: Daveynin


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