How REI’s Co-op Retail Model Helps Its Bottom Line
For a few years retailers have been facing some big challenges: falling in-store sales and the shuttering of big box stores. That’s led many to wonder how outdoor specialty retailer Recreational Equipment Inc. (REI) could be doing so well, as seemingly similar companies, such as Sports Authority, go bankrupt. REI’s annual revenue grew by 5.5 percent in 2016, and the company reports healthy sales growth for both its brick-and-mortar and online stores.
The answer to all these questions may have something to do with the company’s business structure: REI is a retail cooperative, meaning it’s owned by its members. The company has created somewhat of a community by offering memberships, offering its over 6 million active members a dividend for future purchases at REI and one vote in an annual board of directors election for $20. That might seem innovative, but perhaps what’s more surprising is that, in many ways, REI is just practicing old-school retail wisdom.
Jerry Stritzke has been the CEO of REI since 2013. I talked to him about the company’s record annual revenue of $2.56 billion in 2016, their decision to close on Black Friday, and the retail landscape through the eyes of a co-op. A lightly
