Recreational Equipment, Inc.
|Industry||Sporting goods and outdoor gear|
Number of locations
|154 (June 2017)|
|Revenue||US$2.38 billion (2015)|
|US$136 million (2012)|
|US$29 million (2012)|
Number of employees
|12,000 (As of 2015[update])|
Recreational Equipment, Inc., commonly known as REI, is an American retail and outdoor recreation services corporation. It is organized as a consumers' co-operative. REI sells sporting goods, camping gear, travel equipment, and clothing. It also offers services such as outdoor-oriented vacations and courses.
Lloyd and Mary Anderson founded REI in Seattle, Washington, in 1938. The Andersons imported an Akadem Pickel ice axe from Austria for themselves as part of The Mountaineers Basic Climbing Course, and decided to set up a co-operative to help other outdoor enthusiasts in the club acquire good quality climbing gear at reasonable prices. On June 23, 1938 with the help from Seattle attorney Ed Rombauer, five Mountaineers met at Rombauer's office, and each paid one dollar to join Recreational Equipment Cooperative. Lloyd and Mary were issued cards No. 1 and 2.
During the first year, Recreational Equipment was nothing more than a shelf at the Puget Sound Cooperative Store, a farmer's co-op near Pike Place Market in Seattle. In 1942, Lloyd moved to a new space down the hall from The Mountaineers club rooms on Pike Street. Jim Whittaker, the first American to summit Mount Everest, was hired as the first full-time employee of REI on July 25, 1955. In 1956, Recreational Equipment Cooperative was incorporated. Whittaker served as CEO during the 1960s and was an early board member with American Alpine Club president Nicholas Clinch. When Whittaker climbed Mount Everest, it provided REI with so much free advertising that the following year, 1964, its gross income topped $1mil for the first time.
Through the 1970s, it identified itself prominently as REI Co-op, focusing primarily on equipment for serious climbers, backpackers, and mountaineering expeditions.
However, in the 1980s, with changes to its board of directors, the emphasis shifted toward family camping and branched out into kayaking, bicycling, and other outdoor sports. It acquired nearby outdoor gear firm Mountain Safety Research in 1981, which later bought tent-maker Edgeworks and produced tents with the MSR brand. REI kept MSR until 2001, when it exited the manufacturing business, selling the operation to Cascade Designs, another successful outdoor gear company in the Seattle area.
Clothing, particularly "sport casual" clothes, also became a greater part of the company's product line. Although the company remained a co-operative, providing special services to its members, the "co-op" moniker was dropped from much of its literature and advertising.
Beginning in 2014, with the introduction of the REI Co-Op line of clothing, REI publicly re-emphasized the cooperative aspect of its business model. In October 2015, the company launched a redesigned logo, which includes the word "co-op" for the first time since 1983.
On Black Friday 2015, REI closed all of its stores, halted the processing of orders on its website, and gave all employees a paid day off. Although Black Friday has been one of REI's top 10 days for annual sales, the company abstained from Black Friday and launched an #OptOutside marketing campaign, urging people to spend their time outside. REI is the first major retailer to forgo operations on Black Friday. They continued the initiative through the 2018 holiday season.
Today, it is consumer-oriented goods, particularly clothing and family camping equipment, that is the mainstay of REI's business. REI continues to sell climbing and backpacking gear.
REI has diversified its offerings into global adventure vacations through the REI Adventures branch, which began in 1987. REI Adventures offers vacations for active travelers all over the world.
In 2006, REI started the Outdoor School in selected markets. The Outdoor School is a series of one-day outings in the local area and in store classes. Offerings include mountain biking, road biking, kayaking, backpacking, rock climbing, outdoor photography, family hiking, snowshoeing and others. The current locations of the Outdoor School are the San Francisco Bay Area, Sacramento and Reno areas, the Los Angeles area, the San Diego area, Boston and New England area, New York Tri-State area, Philadelphia, Washington D.C./Maryland/Virginia area, Chicago area, Minneapolis area, Denver area, Atlanta area, Portland area, and Puget Sound area.
On June 11, 2015, REI bought Adventure Projects Inc., a Boulder-based company, founded by Nick Wilder and Andy Laakmann in 2005, which is best known for its climbing website, Mountain Project (MountainProject.com), with guides to more than 128,000 climbing routes across the world. It has since expanded by creating MTBProject.com, a website for mountain bike trail maps, HikingProject.com, for hiking trails, PowderProject.com, for backcountry skiing trails, and TrailRunProject.com, for cross-country running trails.
Sally Jewell joined the board of REI in 1996 and in 2000 was named chief operating officer. She became CEO in 2005. Jewell remained CEO of REI until she was named United States Secretary of the Interior in April 2013.
REI is a member owned co-operative headquartered in Kent, Washington, until 2020, when it will move to the Spring District in Bellevue, Washington. It is owned by its members, who each hold a single voting share. Members are entitled to a patronage dividend.
Its flagship stores are in Cascade, Seattle, Washington; Bloomington, Minnesota; Washington, DC; New York City; and Denver, Colorado. It has distribution centers in Sumner, Washington; Bedford, Pennsylvania; and Goodyear, Arizona.
REI is owned by its active members, persons who have paid a $20 lifetime membership fee and have purchased $10 or more of merchandise from REI in a given calendar year. Each active member is entitled to vote for members of the company's board of directors and receives a patronage dividend.
The annual dividend is normally equal to 10% of what a member spent at REI on regular-priced merchandise in the prior year. The dividend, which becomes unredeemable on December 31 two years from the date of issue, can be used as credit for further purchases or taken as cash or check between July 1 and December 31 of the year that the dividend is valid.
REI members are allowed to buy returned/used/damaged goods at significant discounts at the REI Used Gear Sales. Other benefits of REI membership include discounts on rentals, deals on shipping charges, REI adventure trips, and shop services, as well as rock wall access at locations that feature indoor climbing walls. The locations include Flagship stores in Denver, Seattle, and Bloomington as well as the Pittsburgh South Side Works store. Members also receive exclusive coupons throughout the year for around 20% off of full-price items.
REI is a Washington corporation governed by a board of 13 directors, including the CEO. Directors serve for terms of one or three years. Board candidates are selected by the REI Board Nomination and Governance Committee. In earlier years, board elections were competitive elections, with both board-nominated and self-nominated petition candidates. In recent years, REI eliminated the opportunity for petition candidates and has nominated only as many candidates as open positions. Members are mailed a ballot, and nominees must garner 50% of returned ballots; members may also vote online. While the board serves at the members' pleasure, there is no path to board membership without the approval of the Board Nomination and Governance Committee. For 2014, its chief executive officer received compensation of approximately $2.71 million per year.
Although the Andersons originally established the co-op structure to secure reduced prices for its members, REI now models itself as a boutique full-service retailer, with a website including order-on-the-web and free delivery to a nearby store, rather than as a low-price retailer. Local stores host free clinics on outdoor topics and organize short trips originating from the store to explore local hikes and cycling paths.
REI employs over 11,000 people, most of them in the stores, many of whom are part-time. Employees receive discounts on merchandise, may be eligible for free or discounted outdoor classes, and also receive a "Yay day" pass, entitling them to spend up to 6 hours outdoors for pay.  REI has been ranked in the top 100 Companies to Work for in the United States by Fortune since 1998, which earned it a place in the Fortune "Hall of Fame". REI ranked as #8 in 2012, #69 in 2014, #58 in 2015, #26 in 2016, and #28 in 2017.
Environmental and community initiatives
In 2006, REI purchased 11 million kWh of green power, enough to offset 20% of its overall power consumption. That placed REI on the US Environmental Protection Agency's top ten list of retailers in purchases of cleanly-generated electricity. By 2007, REI promises to make its trips through REI Adventures carbon neutral by the purchasing of green power credits "Green Tags". REI Adventures states that it is the first US travel company to introduce that type of program. REI has pledged to be a climate neutral and zero waste to landfill company in 2020 by focusing on the five areas of its business: green buildings, product stewardship, proper paper usage, reducing waste and energy efficiency.
To support local communities, REI offers meeting space free of charge to non-profit organizations, supports conservation efforts, and organizes yearly outdoor service outings. REI donates annually to conservation groups in the US. Its 2007 giving of $3.7 million represented about 0.28% of its $1.3 billion in gross sales. It also sends volunteers to help groups with cleaning up the environment, building new trails, and teaching children the importance of caring for the environment.
REI is a key sponsor of The Access Fund, a non-profit organization committed to keeping America's climbing areas open by education, environmental protection, and advocacy.
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- REI Bylaws
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REI's board is legally responsible by statute, and its Articles of Incorporation and Bylaws, for the overall direction of the affairs and the performance of REI. The board carries out this legal responsibility by establishing broad policy, and by monitoring management within the framework of these broad policy guidelines.
- Gear Junkie
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- REI Adventures: REI Carbon-Neutral Travel
- 2006 REI Stewardship Report: Sustaining the Natural World
- 2007 Business Wire reporting of press release with figures Archived January 18, 2009, at the Wayback Machine
- REI: About REI