REI Store Closures in NYC and Boston Challenge CEO’s Employee Strategy
Mary Beth Laughton, who assumed the role of CEO at REI in 2024, has made significant moves to improve employee relations amid ongoing challenges for the outdoor retailer. An early action included an apology for the company’s support of Doug Burgum, a candidate for Secretary of the Interior endorsed by her predecessor. Laughton acknowledged this decision as a mistake.
REI, known as Recreational Equipment Inc., caters to outdoor enthusiasts, and its employees are recognized by their “Green Vest” uniforms. However, employee dissatisfaction has been on the rise, fueled by a corporate culture perceived to drift from the company’s co-op values. REI has traditionally offered its members dividends equal to 10% of purchases and returns approximately 70% of profits through various initiatives.
Recent Store Closures and Strategic Plan
Despite Laughton’s commitments to improve relations with employees, REI announced the closure of three stores in 2026. Among these is the flagship location in New York’s SoHo, alongside shops in Boston and Paramus, New Jersey. This decision coincides with Laughton’s initiative called “Peak 28: Ascending Together,” which outlines strategic goals for the company by 2028.
In a recent letter to employees, Laughton described the need for “tough choices” to drive sales growth. Specifics were not provided, although a revamped customer loyalty program was mentioned as a forthcoming change. Furthermore, Laughton urged teams to elevate their performance, aiming for REI to be recognized not just as a co-op but also as a leading retailer.
Employee Response and Union Concerns
The union representing workers at the affected New York and Boston stores expressed surprise at the closures. The union indicated that these decisions could threaten recent advancements achieved through negotiations, including targeted contracts and restored wage increases.
- Union statement sought more transparency regarding store closures.
- Negotiations were in motion following a successful summer agreement between REI and the REI Union.
The backdrop of these developments includes previous executive decisions under Laughton’s predecessor, Eric Artz. Changes made during Artz’s tenure, such as hiring practices shift and centralizing decision-making, sparked employee dissatisfaction. This led to the formation of unions at several REI locations, including the pioneering unionization of the New York City store in 2022.
Laughton reiterated the necessity for REI to adapt for competitiveness. In her correspondence to staff, she stressed that the future strategy is about moving forward rather than returning to the co-op’s past. Store closures were framed as a strategic move necessary for maintaining operational health during lease renewals.
As REI moves forward under Laughton’s leadership, the company faces the dual challenge of navigating financial issues while rebuilding employee trust and morale. The balance between maintaining a strong co-op identity and evolving in a competitive market remains crucial to their strategy.
