How REI’s store closings in New York and Boston could derail the CEO’s efforts to win over employees

“Let me be clear, signing that letter was a mistake,” she said, referring to a letter her predecessor Eric Artz signed, along with a number of other outdoor focused companies, supporting Burgum’s nomination.

As detailed in 2024 in a Fortune examination, REI (“Recreational Equipment Inc”) employees, known as “Green Vests” for their trademark in-store apparel, had been increasingly unhappy in recent years with what they saw as the rise of a corporate culture that undermined the values and purpose of the beloved co-op. (As a co-op, REI pays members a dividend, essentially a store credit equal to 10% of what they spent on full-price items the year before. In addition, REI has historically given back amounts equivalent to about 70% of profits each year in the form of dividends, employee bonuses, and investments in the outdoor industry.)

Repairing relations with those front-line workers was key for Laughton, especially as the brand struggled: In 2024, REI sales fell 6% to $3.53 billion, following declines in the two prior years. The new CEO told Fortune in May 2025 that she wanted to return to “focusing on our roots,” and she praised the Green Vests. But in the last week, Laughton and her executive team have made moves that could complicate those efforts and revive tensions.

Earlier this week, REI announced that it was closing three stores in 2026 including its massive, bustling flagship in New York’s SoHo district, as well as stores in Boston and Paramus, N.J. And in a letter to employees sent last week before the store closings, Laughton outlined a three-year strategic plan that she called “Peak 28: Ascending Together,” a reference to goals to hit by 2028 and to REI’s origins as a mountaineering supplies company. Laughton warned staff that to grow sales the brand would have to make “tough choices” without specifying what those choices might be, according to Bicycle Retailer, a trade publication. (The only change Laughton specified was that REI would overhaul its customer loyalty program.)

She went on to say that she and the REI workforce should “challenge ourselves to be not just the best co-op, but also the best retailer.”

In a statement following this week’s announcement, the union representing the workers at the New York and Boston stores (the Paramus, N.J. store is not unionized) hinted that it had been blindsided by the news. It suggested that the closings, and the layoffs that will ensue, could jeopardize the progress made this summer when REI Co-op agreed to begin contract negotiations with its 11 unionized stores, on whose behalf the union dropped a federal complaint after the retailer agreed to restore wage increases.

“We are seeking more information to understand this decision,” the union said in an email to Fortune, “and we hope that the new relationship established this past summer between REI and the REI Union will enable both parties to secure the best possible outcome for the affected workers.”

Relations between the green vests and the company have been strained for some time. Indeed, after the pandemic—which initially decimated sales but then led to a surge in business that overwhelmed REI’s supply chain and operations—Artz made moves that angered many employees.

To stabilize the company, he implemented more centralized decision-making, conducted a costly overhaul of REI’s e-commerce, and hired a raft of executives from large national retailers—leaving many Green Vests, and industry observers, to wonder whether REI would lose its soul by operating like big-box rivals such as Cabela’s, Dick’s Sporting Goods, or Walmart. Artz and other executives defended the hiring of executives from other retailers—a change from its prior focus on internal recruitment—and blamed the company’s financial problems on REI’s high costs from member dividends and the donations it makes.

During Artz’s tenure, efforts to unionize stores proliferated: The New York City store was the first to unionize, in 2022, and is now one of 11 such REI locations, along with Boston.

Like Artz before her, Laughton has argued that REI has to be competitive with rivals to survive, and in her letter she warned staff against falling into the mindset of nostalgia. “This plan is not about getting back to what the co-op used to be,” she wrote. “It’s about climbing the challenging peak that’s in front of us, putting the co-op on more solid footing.”

While REI did not say exactly why it was closing the stores, its statement about the matter sounded a note similar to Laughton’s letter, framing the decision as necessary for the company’s health: “Exiting stores at the time of lease renewal that do not meet these considerations is a responsible and prudent part of running a retail business.”