SEATTLE (BRAIN) — REI Co-op announced it will close its Experiences division that includes adventure travel, day tours, and classes. The decision was announced in an email to employees Wednesday from President and CEO Eric Artz and will mean the elimination of 428 full- and part-time jobs in that division.
Customers who booked trips and day programs will receive full refunds and REI will work to address any associated non-refundable expenses.
"We know this decision will also significantly impact many of the travel partners that we work with across the U.S.," Artz wrote. "We will begin informing partners this week and will work with them to terminate our existing contracts."
The Experiences division served 40,000 customers last year, Artz wrote, which was fewer than 0.4% of all co-op customers, and Artz said in the email that even in its best year in 2019 did not generate a profit.
"When we look at the all-up costs of running this business, including costs like marketing and technology, we are losing millions of dollars every year and subsidizing Experiences with profits from other parts of the business, ..." Artz wrote.
Despite exploring several options to continue the division, its unprofitability made continuing it impossible, Artz wrote.
"Every path to profitability we explored would have required us to invest more time, effort, and focus away from parts of the business that reach significantly more customers, drive more positive financial outcomes, and have greater impact on our mission to get people outside."
Each of the 180 full-time employees will receive their salary through March 9 and benefits through March 31. They also are eligible for separation benefits including severance, healthcare coverage continuation through COBRA, and outplacement service help. Employees who split time between Experiences and store work will discuss options with their manager.
The 248 part-time employees will have benefits continue through January and will be eligible for severance pay.
Artz wrote that while there remains a role for REI to play in "outdoor education and expertise," there needs to be a re-evaluation of how the co-op does it "to ensure they're relevant to our customers, aligned to our mission and financially viable."
