One of the first public things of the new CEO of Rei, Mary Beth Laughton, took the reins at the beginning of spring was to apologize for the approval of the outdoor retailer in January of President Trump's candidate for the interior secretary, the agency that oversees public land such as national parks.
The Seattle Region cooperative under its predecessor Eric Artz had signed a letter by a number of companies focused on the outdoors supporting Doug Burgum with “strong support”, saying that he wanted a “table at the table”. But during his first months of work, Burgum called for extracting natural resources from virgin land in Alaska, building housing on public land and supporting the coal industry, ideas that are an anathema for many members and employees of REI.
A little less than two weeks in his mandate as CEO, Laughton has published a video on Instagram saying that “our public lands are attacked”. “Let me be clear, to sign this letter was a mistake,” she said. Rei's original position had angry many customers and employees, which he cannot afford at a difficult time for the retailer given the approximate patch that he crosses the two in terms of challenges to his company and his relationships often tense with store workers, known as green vests for the brand clothes they wear.
“One way to show your values ​​is to show action,” says Laughton Fortune In his first national interview with the media as CEO before annual REI and financial results reports. “At one time, our public lands are threatened and values ​​such as diversity and inclusion are threatened, we are clear that we think that these values ​​are essential to our business.”
In recent years, Rei, a cooperative loved for its seriousness, store workers who are still eager to talk about camping equipment, and the outside plea, have dropped, declaring net losses in 2023 and 2022 and sales down 2.4% in 2023. Thursday, REI, however, reported a loss of sales of 6.3% to 3.53 billion stems from their dividend members and annual costs such as advocacy and employee incentives.
Adding to pressure on the company, some 11 stores in its fleet of nearly 200 locations have voted to unionize in recent years. As detailed by Fortune Last summer, some workers, including some former leaders, feared that Rei would become too many business. In recent years, the company has hired many leaders of large retailers, has lost many longtime initiates, and its board of directors has included companies of companies like Exxonmobil and McKinsey. The administrators of the board of directors have three -year mandates. Nine people sit on the company's board of directors with the CEO.
Before the annual meeting on Thursday, the union clearly indicated that it would keep the heat even with Artz Out and Laughton, encouraging employees who are members and can therefore vote to retain their support for the board of directors for the slate of Rei candidates.
The union left a comment on the Instagram video publication on the overthrow of the approval of Burgum saying “so happy to see the new CEO intensify and take responsibility! It is time for a new path. Mary Beth, we hope to see you soon at the negotiating table. It's been 3 years – it's time to negotiate.” (Laughton says that she is “really committed” to negotiate in good faith.)
In a letter to Thursday staff, Laughton recognized friction and presented certain initial stages to improve relations and communications between the base and the management and the board of directors. “All clearly told me that we have a lot for us. This community appreciates
Outside, believes in the cooperative and wants to help shape a flourishing future, “she wrote.” But I also heard that we have work to do to find all the confidence of our community. “”
And so it is up to Laughton not to direct only Rei, which means Recreational Equipment Inc, through a period of difficult competition and an uncertain consumption environment, but also extract it from its existential anxiety.
Repair of relations with “secret sauce”
Laughton spent the first two months listening to the members of the cooperative (it is not necessary to be a member to buy) to understand both what they want to rei as a business in terms of values, but also what they want to buy them. She also gets to know employees and visited dozens of stores for a land configuration. The details of its recovery plan, such as new stores, store experience, brand assortment, electronic commerce features are still to come.
But Laughton, who became a member of Rei in the 1990s, says that his primordial theme is that Rei must return to what made him loved by outdoor enthusiasts in the first place (he was launched in 1938 by mountain climbers who seek to put money to obtain offers on equipment).
“One of the first things is to focus on returning to our roots and setting up our members at the center of everything we do,” she said. And calling the green vests, the “secret sauce” of Rei, Laughton says that she wants to keep Rei “an incredible place” to work.
At the same time, the first two C-Suite appointments since they became CEO have their roots in America companies. His new financial director, Shannon Damen is a former colleague from Laughton's athletics, and the new marketing chief of Kristin Shane is a former guitar center, Petsmart and Target.
Laughton does not apologize for having chosen senior executives from the outside of Rei. “I need retail experts to help me direct the future of this brand,” she said, noting that like her, these leaders have an “authentic passion” for the outdoors. The CEO cites hiking and kayaking among its most popular outdoor activities. She also noted that Rei has a combination of long -standing leaders and new executives of the retail giants.
Although she says that Rei being a cooperative gives him an advantage, he also has a drawback. Each year, the members obtain a dividend, which the company now prefers to call a “reward of members” – a store credit equal to 10% of what they spent for articles at high prices the previous year. Rei has historically rendered amounts equivalent to around 70% of the profits each year in the form of dividends, employee bonuses and investments in the outside sector. This generosity is at the heart of its mission, but it makes the structure of REI costs higher than that of many competitors, which gives it less room to maneuver during its reversal.
And so while Laughton is categorical about improving the advocacy of Rei and ethics based on values, it sees the need to be pragmatic on this subject.
“We have to make sure that we make profits in order to continue to live our values ​​and our goal,” she said.
This story was initially presented on Fortune.com
