REI reported that it didn’t make a profit in 2020 and consequently won’t be able to pay out its usual annual dividend to members. However, the Co-op said that because the year ended better than expected, a special reward would be paid to members.
News of the loss and the special dividend was revealed in a blog entry from its VP of marketing, Vivienne Long.
In the entry, Long said REI was one of the first retailers to proactively close all of its stores last spring as the pandemic emerged. She added, “What we first thought might last a week or two ended up stretching for nearly two months. And while we ended the year in a strong financial position with a healthy cash balance and no debt, our temporary store closure and great challenges posed by the pandemic meant we ended 2020 without making a profit.”
Long noted that amid all the disruption and challenges, the pandemic served as a reminder of “the importance of time outside and our role in helping people get out there.” REI also welcomed almost one million new members to its Co-op community and introduced curbside pickup and virtual outfittings, and “helped many people discover a favorite new outdoor activity.”
She added that many members had reached out to REI and supported the retailer through the year.
“As challenging as last year was, we have something others don’t—you,” wrote Long. “Our members are at the center of who we are and how we operate. You asked us how you could help the Co-op; we responded by asking for your continued loyalty as Co-op members. We’re grateful for your support. Because of you, we made it through 2020 in better shape than we initially projected, and we believe the future is brighter than ever.”
Due to the loss, the usual member dividend, representing a share of REI’s profits, will not be issued. However, a member reward equivalent to what the dividend would have been will be paid as a 10 percent back on each member’s eligible full-price purchases in 2020.
Long wrote, “This will feel a lot like the dividend experience you’re used to, and you’ll see your total reward in your account on March 1.”
Some differences between the member dividend are the special reward will expire December 31, 2021, and cannot be cashed out.
Long concluded, “It’s our way of saying thank you for your loyalty and support in 2020, and our hope that you get to enjoy lots of time outside in 2021. In good times or bad, our community always comes first. It’s the Co-op way.”
Photo courtesy REI
