Outdoor retailer REI announced Tuesday that it is closing its Experiences division, including its cycling tours, bike vacations, learn-to-ride programming and mechanics workshops.
This move impacts 428 jobs as the company refocuses on the more profitable parts of its business.
The Experiences division has operated for 40 years, providing outdoor education and experiences to nearly a million people during that time. Yet this part of the business has consistently failed to turn a profit, even during its peak year in 2019. In an email to his employees, REI President and CEO Eric Artz shared that in 2024, the division served approximately 40,000 customers, which is less than 0.4% of the Co-Op’s customer base, while incurring millions of dollars in losses.
Thus, on Tuesday, Artz made the ‘difficult but necessary’ decision to “exit the Experiences business altogether” starting this week.
“The reality is a thriving co-op requires a sustainable economic model that is capable of investing at the appropriate level to fully fund our most critical strategic ambitions,” Artz wrote in his letter.
“We have gone through many iterations and explored multiple options to keep this business up and running and to preserve jobs. We’ve held out as long as possible, but the fact remains that Experiences is an unprofitable business for the co-op, and we must adjust course.”
Impact on employees and customers
The division’s closure will affect 428 jobs – 180 full-time employees and 248 part-time guides. The company will also terminate contracts with its travel partners.
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Full-time workers will receive their salaries through the beginning of March 2025, along with severance packages, extended healthcare coverage and job placement support. Part-time employees will retain benefits through January 2025 and receive severance pay.
Meanwhile, customers who had already booked classes or trips for 2025 will be refunded.
Financials
Artz shared that the 2024 financial year was a “positive step in our journey to return to a healthy economic model.” But while REI’s financial performance showed improvement in 2024, it still fell short of profitability.
“Our preliminary financials indicate we will be close to breakeven for both Pre-Dividend Operating Income (PDOI) and Free Cash Flow (FCF). This is a significant improvement over 2023…At the same time, we still have more work to do to return the co-op to sustainable, profitable growth,” Artz said.
The elimination of the brand’s experiences division is part of that work.
“Every path to profitability [of the Experiences business] we explored would have required us to invest more time, effort and focus away from parts of the business that reach significantly more customers, drive more positive financial outcomes, and have greater impact on our mission to get people outside,” Artz stated.
“Given the current business landscape and our strategic priorities, we must invest selectively, focusing our efforts in the areas that align most closely with our long-term commercial goals and set us up to deliver on our mission and purpose for another 86 years.”
Future Plans
As REI steps away from the Experiences business, the company aims to re-focus its resources on its core areas, primarily outdoor gear and apparel.
“Our roots are in the gear and apparel we sell and the outdoor moments they enable…I believe when we stay focused on what we do best, we can and will succeed,” Artz stated.
With that said, some indoor classes will continue in 2025 –now listed as ‘events’– and the company remains open to exploring new ways to deliver outdoor education.
“We continue to believe there is a role for REI in outdoor education and expertise,” Artz shared, adding that REI will fund a small team to test new approaches in this area in the coming year.
