• by Sarah Mahoney  @mahoney_sarah, January 13, 2025

REI is exiting the experience business to better focus on core retail operations. The Experiences division has been selling classes, day tours and adventure travel for over 40 years. REI, a retail co-op with 24 million members, says the closure will eliminate 180 full-time employees and 248 part-time guides.

Eric Artz, president and CEO of the Sumner, Washington-based collective, broke the news to employees with a letter on the website, calling the “difficult” decision necessary as the company fights its way back to profitability.

“The reality is a thriving co-op requires a sustainable economic model capable of investing at the appropriate level to fully fund our most critical strategic ambitions,” he wrote. “While we are still in the process of finalizing 2024 results, our preliminary financials indicate we will be close to breakeven” in both cash flow and operating income.

That represents a “significant improvement over 2023,” which the retailer achieved by tightening inventory management, boosting the mix of full-price items, and doubling down on cost controls. “We still have more work to return the co-op to sustainable, profitable growth,” he said.

In some ways, the move is surprising, given that retailers everywhere are seeking ways to increase experiential engagement, hoping real-life interactions will help differentiate themselves from online sameness. “Community building” has become an industrywide rallying cry. Dick’s Sporting Goods, for example, is expanding its Public Lands concepts, which offers some classes and experiences, and those are also a core component of its expanding House of Sport stores. And classes and events have become a core component of Lululemon’s offering

But REI's Experiences division, which had trips as varied as local kayak paddles to base camp at Mt. Everest, has long been a money loser for REI.

While the division served 40,000 customers in 2024 -- and 1 million since inception -- Artz notes that group is less than 0.4% of all co-op customers. Including marketing and technology, “we are losing millions of dollars every year and subsidizing Experiences with profits from other parts of the business. Even at our peak in 2019 -- our best year for Experiences ever -- we did not generate a profit.”

Customers currently booked on trips and day programs will receive a full refund of costs paid to REI.

Artz said the company believes REI has opportunities in outdoor education and expertise: “However, we need to reexamine and rework how we deliver classes and education to ensure they’re relevant to our customers, aligned to our mission, and financially viable.”