REI Co-op reported 2019 sales grew 12.3 percent year-over-year to reach a record of $3.1 billion, but net income of $21 million marked a 55.3 percent decrease from $47.1 million the previous year.
The 2018 sales total of $2.78 billion had been a record at the time, eclipsing the previous year’s mark by 6 percent.
REI in 2019 posted 3.5 percent comparable growth in-store traffic and added eight new stores, bringing the co-op’s total to 160 in the U.S.
REI spokesperson Halley Knigge told SGB the decline in net income was because “2019 was a significant year for reinvestment in our business. This included vastly expanding our rentals and used gear offerings and adding eight new stores. As an 82-year-old company, we believe these investments are setting the co-op up for success in our next 80 years, as our customers begin to demand more rentals, used gear and experiences offerings.”
She said examples include the addition of members being able to sell used gear and a new retail format in North Conway, NH, that combines retail, rentals and experiences in the in-store experience.
Each year, REI returns about 70 percent of its profits back to the outdoor community, supporting employee retirement, helping fund trail work, returning dividends to members and supporting nonprofits that help get people outside. In 2019, this allowed REI to:
- Invest $8.1 million into 467 nonprofits, stewarding more than 6,000 outdoor places and more than 9,000 miles of trails.
- Give $78.5 million to employees through profit-sharing and retirement.
- Return $210.8 million to members through dividends and credit card rewards.
Full audited financials for 2019 are available here.
REI operates more than 160 stores in the U.S., but each of them has been closed for more than a month amid the coronavirus outbreak.
On April 6, REI said it will furlough most retail and field employees for 90 days beginning April 15 as the company planned to keep stores closed indefinitely. CEO Eric Artz made the announcement in an email sent to the “co-op community.” Click here to read the full letter.
Other measures include Artz forfeiting 100 percent of his base salary for the next six months and his incentive eligibility for 2020. REI’s board of directors will forfeit their fees for the next six months as well. And REI’s entire senior leadership team will take a 20 percent pay reduction for the next six months and forfeit all incentive eligibility for 2020.
“We have made the decision to begin an unpaid 90-day furlough of the majority of our retail and field employees, beginning on April 15,” Artz wrote in the email. “During this period, all health and welfare benefits will continue as normal for all eligible furloughed employees. In addition, REI will also pay the employee portion of benefit premiums, which means we’ll be covering 100 percent of eligible employee health and welfare premium costs for all furloughed employees for all 90 days for those employees. All furloughed employees will be eligible to apply for government-funded unemployment pay.”
Photo courtesy REI Seattle