How REI’s store closings in New York and Boston could derail the CEO’s efforts to win over employees

“Let me be clear, signing that letter was a mistake,” she said, referring to the letter her predecessor, Eric Artz, signed, along with a number of other outdoor-focused companies, in support of Burgum’s nomination.

As detailed in 2024 in A luck On examination, REI (“Recreational Equipment Inc”) employees, known as “Green Vests” after their in-store branded clothing, have been increasingly dissatisfied in recent years with what they see as the rise of a corporate culture that has undermined the values ​​and purpose of their beloved co-op. (As a co-op, REI pays members a dividend, which is essentially a store credit equal to 10% of what they spent on full-price items in the previous year. Additionally, REI has historically returned amounts equal to about 70% of profits each year in the form of dividends, employee bonuses, and outdoor industry investments.)

Repairing relationships with front-line workers has been key for Laughton, especially as the brand struggles: In 2024, REI’s sales fell 6% to $3.53 billion, after declines in the previous two years. The new CEO said luck In May 2025, she wanted to return to “focusing on our roots”, and praised the green jackets. But last week, Lawton and her executive team took steps that could complicate those efforts and revive tensions.

Earlier this week, REI announced it would close three stores in 2026, including its massive, bustling flagship store in New York’s SoHo district, as well as stores in Boston and Paramus, New Jersey. In a letter to employees sent last week before the store closed, Lawton outlined a three-year strategic plan it called “Peak 28: Climb Together,” a reference to goals to be achieved by 2028 and to REI’s assets as mountaineering supplies. a company. Lawton warned employees that to increase sales, the brand would have to make “hard choices” without specifying what those choices would be, according to Lawton. Bicycle dealera trade publication. (The only change Lawton specified is that REI will overhaul its customer loyalty program.)

She went on to say that she and REI’s workforce must “challenge ourselves to not only be the best co-op, but also the best retailer.”

In a statement following this week’s announcement, the union representing workers at the New York and Boston stores (the Paramus, N.J., store is not unionized) implied it was shocked by the news. She noted that the closures and layoffs that would follow could jeopardize the progress made this summer when REI Co-op agreed to begin contract negotiations with its 11 unionized stores, on whose behalf the union dropped a federal complaint after the retailer agreed to take back wage increases.

“We are seeking more information to understand this decision,” the union said in an email. luck“We hope that the new relationship established last summer between REI and the REI union will enable both parties to secure the best possible outcome for affected workers.”

Relations between the Green Vest movement and the company have been tense for some time. In fact, after the pandemic — which initially decimated sales but then led to a boom in business that overwhelmed REI’s supply chain and operations — Artz took steps that angered many employees.

To stabilize the company, he implemented more centralized decision-making, undertook a costly overhaul of REI’s e-commerce, and hired a group of executives from major national retailers — leaving many Green Vests, and industry observers, wondering whether REI would lose its soul by operating like big-box competitors like Cabela’s, or Dick’s. Sporting Goods, or Walmart. Artz and other executives defended hiring executives from other retailers — a change from its previous focus on internal hiring — and blamed the company’s financial woes on REI’s high costs from member profits and donations.

During Artz’s tenure, efforts to unionize stores have proliferated: The New York City store was the first to unionize, in 2022, and is now one of 11 REI locations, along with Boston.

Like Artz before her, Lawton argued that REI must be able to compete with competitors to survive, and in her letter she warned employees against falling into a nostalgia mindset. “This plan is not about going back to what the co-op used to be,” she wrote. “It’s about climbing the difficult peak in front of us, and putting the co-op on a more solid footing.”

While REI did not say exactly why it was closing the stores, its statement on the matter sounded on a similar note to Lawton’s letter, positioning the decision as essential to the health of the company: “Exiting stores at lease renewal time that do not meet these considerations is a responsible and prudent part of running a retail business.”

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