If you’re an REI member and you’ve checked your email today, okay, and assuming you read REI emails, this might not be news, but: REI told members this morning the co-op didn’t make a profit in 2020, and therefore, they won’t be earning a dividend as they would in normal years. Instead, members will receive a reward (credit) for purchases at REI in the amount their dividend would have been, had there been one. Unlike a member dividend, however, the reward can’t be redeemed for cash—it must be used to buy something at REI.
This may seem strange, considering the boom in outdoor adventure during the pandemic, and especially if you’d tried to buy almost any piece of gear for outdoor adventures and found it to be out of stock. But most of the stock issues are related to supply chain shortages due to pandemic, not necessarily a crush of outdoor purchases. REI was also one of the first big retailers to completely close when the pandemic hit, taking a massive hit in their profits in the process.
REI members received an email this morning from Vivienne Long, Vice President of Marketing:
“2020 was a year like no other—at the co-op and around the world. Many organizations would say that the past year was among the most difficult years in their history. The same is true for our co-op.
We were one of the first retailers to proactively close all of our stores last spring, as the significance of the pandemic began to take shape. What we first thought might last a week or two ended up stretching for nearly two months. And while we ended the year in a strong financial position, with a healthy cash balance and no debt, our temporary store closure and great challenges posed by the pandemic meant we ended 2020 without making a profit…As challenging as last year was, we have something others don’t—you. Our members are at the center of who we are and how we operate. You asked us how you could help the co-op; we responded by asking for your continued loyalty as co-op members. We’re grateful for your support. Because of you, we made it through 2020 in better shape than we initially projected, and we believe the future is brighter than ever.”
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To all REI members. Your co-op is wonderful and has a great history.
However, take care. In Canada, our 49-year-old Mtn Equipment Co-operative (MEC) ran into difficult times. (various reasons have been cited).
Ultimately, in the fall of 2020, MEC was sold, without consulting the co-op members. It was sold to a US-based private equity firm: Kingswood Capital Management.
MEC is no longer a co-op and it’s not member owned.
So, be careful, REI is a great co-op. I hope it remains that way and is guided by senior management that is beholden to the Co-op members.
How do you ‘take care’ when you have no control? MEC members didn’t want it sold yet it happened under their noses and there was nothing they could do about it.
Wise warnings. REI is already an entity with little to no accountability to its owners. The whole dividend concept would be much better for members as an immediate 10% discount (instead of what is effectively a loan, and a grossed up price upon which sales tax is paid). REI acts much more as a large retail discounter now than an org focused on its members. (remember when they had a market leading return policy…)
Large retail discounter? Have you seen the prices on the clothes? Not seeing much discount there. I occasionally go for the big garage sale, but otherwise, out of my income bracket for most items. Don’t get me started on their crappy first aid kits…..
It was a market leading return policy until members started abusing the policy. When you think your running shoes should last two years and return them for not lasting long enough…that’s called fraud!
So much truth and can be expounded upon in your statement. People expect to pay for a Huffy and get a Moots experience. Consumers are lulled into this by the quick shipping, low price online world. See an article online about fly fishing and want to be an expert fly fisherman? Hell, read a couple articles, overnight a starter kit, and boom, the next day you can dress and look like a pro with equipment to match. Years ago I worked in a top 100 IBD, catered to hardcore cyclist and those who could afford to look like one but with brand new bikes and gear. People would come in and spend hours picking our brains, learning, attending workshops and we’d piece together complete bikes, all the accessories, clothes, etc. They’d gladly drop their card and pay whatever the cash register rang up. Now, that buyer reads a couple ankle deep articles or a bike forum and is an “expert”, comes to the shop and buys one or two things they low- ball you on and then order online or from a big box. But they want you to install it for free or a discount because they bought a couple low margin items from you in the process. I and many saw this trend coming way back, especially early to mid 2000s. Hell, even late 90s. Our overlord Bezos has made his billions off this, doing whatever the customer wants. They’ve been trained. Worse, many now don’t even know the joy of learning a new sport or hobby and appreciating the process, it’s all about getting product and then instagramming it. I could go on. I’m not trying to be a “get off my lawn” guy it is just a sad fact and reality now. This is a long way of saying most consumers are conditioned, by the retailers, to know thy can buy a pair of shoes, train and run a marathon in them, then return them because they got a blister on mile 25. I’m an off-road auto enthusiast (I know I’m contributing to global warming but it gets me to the rock or beach), it is funny to read comments on reviews of vehicles and parts. People literally pick apart a 40-50 grand off-road vehicle that will do more and can accomplish more than ever in history, all while keeping you warm or cool, giving you a wi-fi signal, and massaging your a$$ with fancy seats, while you trek across the land, and they are pissed because they have to touch through one extra screen on the nav to get to a specific menu. Coddled are us all.
I hope REI can survive. For as imperfect as they are, I would rather we had REI’s across the country and their environmental/social projects going on, than have Backcountry.com taking over and taking anyone to court who uses the term backcountry.
Agreed, I’ll take rei over online . It’s no angel, but I don’t want worse.
Disappointing but not surprising. My local store was closed for months and the shelves were bare within days of reopening (except for the clothes). It’s still not entirely back to normal. I don’t see how you can close any major retail business for months and still expect to break even or profit. I hope they can recover. I lived through the loss of EMS and wouldn’t be able to source my stuff from the remaining retailer in my area, Dicks. I still enjoy going to a store to survey the options versus buying entirely online.
Snewsnet/Outside carried quite the expose on REI this week as well. https://www.snewsnet.com/the-voice/goliaths-reckoning?fbclid=IwAR1TLZnfkmf9qahz-p22XWVGKYrijeawMDdOeezvMZQitTwiccIeAu0P9ug
Thanks for the link to that article. I’d agree with much of what was written.
REI lost me when they started to carry yoga mats etc.. and for the last 10 years, at least, the local store (san francisco Brennan st) hardly stocks size sm or md anymore. always xl, xxl,…
and the printed catalogs? the running commentary is atrocious!
useless!
Curious, why is selling yoga mats the hill you decided to die on?