Exclusive: REI’s CEO shares the retailing co-op’s growth strategy

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When Mary Beth Laughton became president and CEO of Recreational Equipment, Inc. (REI) earlier this year, she inherited an organization with a rich heritage: REI was founded in 1938 by Lloyd and Mary Anderson, who joined some fellow outdoor enthusiast friends to buy ice axes that were only available in Europe at the time. Since then, REI has retained its status as a cooperative (co-op)—a $30 lifetime membership fee unlocks member rewards, discounts, and free standard shipping—and now boasts 25 million lifetime members, 195 stores, and 14,000 employees.

Laughton came into a company that was losing money and ceding ground to competitors. REI reported a net loss of $156.4 million in 2024; revenue fell 6.2% to $3.53 billion.

To reverse the slide and position the brand to become “the most trusted retailer for people who love the outdoors,” Laughton last week unveiled a multi-year strategic plan that aims to leverage REI’s strengths while improving retail and membership experiences. She spoke exclusively with Modern CEO about the plan.

Evolve, evaluate, elevate, engage

“It’s not about necessarily reinventing the co-op,” she says of the strategy. “It’s about unleashing these assets that we already have and make us unique. But the reality is that we need to drive profit so that we can reinvest in communities and employees and back into the business.”

The plan calls for REI to evolve its culture, evaluate its inventory to make sure stores are stocked with a comprehensive and current product assortment, elevate its customer service and experience, and engage members.

“We’re talking about being a more connected, focused, and trailblazing culture,” she says, putting customers at the center, doing fewer but more high-impact projects, and moving faster. She adds: “If we don’t get the culture right, the rest of the strategic pillars aren’t going to matter.”

Differentiating the REI experience

To combat competition from big-box retailers such as Dick’s Sporting Goods, e-commerce giant Amazon, and newer brands with their own stores such as Cotopaxi, Laughton and her team are focused on differentiating the REI shopping experience. They are doing so with products that appeal to casual and expert outdoorspeople alike, while tapping into the knowledge and insights of REI’s 9,000 retail employees, known as “Green Vests” in a nod to the uniform they wear. “They have a lot of passion for the outdoors; they can offer a lot of guidance and expertise,” she says. She’s also looking for ways to “bring the Green Vest online”—weave expert advice throughout the online shopping experience.

Those Green Vests also have their own expectations of REI. Employees at 11 stores have voted to unionize, an effort that began in 2020 amid concerns about worker safety during the pandemic. Earlier this year, REI and the unions that represent the workers reached an agreement that paves the way for contract negotiations. “We’re showing that we want to make progress, and we’re working collaboratively to get there,” Laughton says.

New vision, solid roots

Laughton is well positioned to help REI get crisp on the fundamentals of retail and online shopping. Before joining the co-op, she ran Nike’s direct-to-consumer (DTC) business globally, which included its more than 6,000 stores, e-commerce site, and more (she spent nearly a decade at the footwear and apparel giant earlier in her career). Before Nike, she was president and CEO of Athleta, spent more than eight years at Sephora, and got her career start as a McKinsey & Company consultant.

In the same way that Athleta expanded its customer base with workout gear in a range of sizes, as well as styles suitable for wear outside the gym or yoga studio, Laughton sees an opportunity to make sure REI is stocked with items that make people feel comfortable and stylish while hiking or skiing. “We have a thousand brands, and we can mix and match and outfit people in a way that they actually want to dress for the outdoors,” she says.

But don’t expect the co-op to stray too far from its roots. “We want to be on-trend, but we also want to make sure that we’re not trendy,” she says. “Because that’s not REI.”

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