Top company by employee – 17 – Recreational Equipment (REI) – Washington US
Industry: Retail – Specialty
Previous rank: 8
2011 revenue ($ millions): $1,798
What makes it so great?
The outdoor-gear retailer lets employees use kayaks, skis, and other equipment for free (and they can buy it new at a steep discount). Paid sabbaticals, unusual in retail, come after 15 years with the company. Training for new hires includes an outdoor service project.
|Headquarters||Kent, Washington, U.S.|
|Key people||Jerry Stritzke, CEO; Eric Artz, Interim COO, Chief Financial Officer and Treasurer; Catherine Walker, Senior Vice President and General Counsel; Michelle Clements, Senior Vice President, Human Resources|
|Industry||Sporting goods and outdoor gear|
|Revenue||US$1.93 billion (2012)|
|Operating income||US$136 million (2012)|
|Net income||US$29 million (2012)|
|Members||11.6 million  (5.1 active) |
|Employees||Over 11,000 (2012) |
Recreational Equipment Inc., commonly known as REI, is a privately held American retail corporation organized as a consumers’ cooperative, selling outdoor recreation gear, sporting goods, and clothing via some 129 retail stores in 32 states, catalogs, and the Internet. The company opens four to six new stores each year. REI’s sales exceeded US$1.8 billion in 2009.
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Lloyd and Mary Anderson founded REI in Seattle, Washington in 1938. The Andersons imported an Akadem Pickel ice axe fromAustria for themselves, and decided to set up a cooperative to help outdoor enthusiasts acquire good quality climbing gear at reasonable prices. Through the 1970s it identified itself prominently as REI Co-op, focusing primarily on equipment for serious climbers, backpackers and mountaineering expeditions. Jim Whittaker, the first American to summit Mt Everest, was hired as the first full-time employee of REI and served as CEO during the 1960s. However, in the 1980s, with changes to its Board of Directors, the emphasis shifted toward family camping and branched out into kayaking, bicycling, and other outdoor sports. Clothing, particularly “sport casual" clothes, also became a greater part of the company’s product line. Although the company is still a cooperative, providing special services to its members, the “co-op" moniker has been dropped from much of its literature and advertising as it solicits business from the general public, even if they are not members.
There is a $20 lifetime membership fee. REI normally pays an annual dividend check to its members equal to 10% of what they spent at REI on regular-priced merchandise in the prior year. The refund, which expires on December 31 two years from the date of issue, can be used as credit for further purchases or taken as cash or check between July 1 and December 31 of the year that the dividend is valid.
REI members are able to buy returned/used/damaged goods at significant discounts at the REI Used Gear Sales. Other benefits of REI membership include discounts on rentals, deals on shipping charges, REI adventure trips, and shop services, as well as rock wall access at locations that feature indoor climbing walls. These locations include Flagship stores in Denver, Seattle, and Bloomington, MN, as well as the Pittsburgh South Side Works store. Members also receive exclusive coupons throughout the year for around 20% off of full-price items.
REI is headquartered in Kent, Washington. Its flagship stores are located in the Cascade neighborhood of Seattle; Bloomington, Minnesota; and in Denver, Colorado. It has distribution centers in Sumner, Washington and Bedford, Pennsylvania.
REI employs over 11,000 people, most of them in the stores, many of whom are part-time. All employees have access to health care benefits. REI has been ranked in the top 100 Companies to Work for in the United States by Fortune Magazine since 1998, which earned them a place in the Fortune Magazine’s “Hall of Fame". REI ranked as #8 in 2013.
REI is governed by a board of 13 directors, one member being the CEO. Directors serve for terms of one or three years. Board candidates are selected by the REI Board Nomination and Governance Committee. In earlier years the elections for the board were a competitive election with both board-nominated and self-nominated petition candidates. In recent years REI has eliminated the opportunity for petition candidates and have only nominated as many candidates as open positions. Members are mailed a ballot, with the nominees required to garner 50% of the ballots returned. Though REI is owned by its membership and the board ostensibly serves at the members’ pleasure, there is no path to board membership without the approval of the Board Nomination and Governance Committee. For 2011, its chief executive officer has a base pay of approximately $750,000 per year.
While the Andersons originally established the co-op structure in order to secure reduced prices for its members, REI today models itself instead as a full-service retailer, with a web site, including order-on-the-web and free delivery to a nearby store, rather than as a low-price retailer. Local stores host free clinics on outdoor topics and organize short trips originating from the store to explore local hikes and cycling paths. To support local communities, REI offers meeting space free of charge to non-profit organizations, supports conservation efforts, and organizes yearly outdoor service outings. REI donates annually to conservation groups in the US. Its 2007 giving of $3.7 million represented about .28 of one percent of its $1.3 billion in gross sales In 2006, REI engaged almost 170,000 people in 900,000 volunteer service hours and company-wide donations exceeded $4 million. They also send volunteers to help groups with cleaning up the environment, building new trails and teaching children the importance of caring for the environment.
In 2006, REI purchased 11 million kilowatt hours of green power, enough to offset twenty percent of its overall power consumption. This purchase placed REI on the United States Environmental Protection Agency‘s top ten list of retailers who purchased cleanly generated electricity. By 2007, REI promises to make its trips through REI Adventures carbon neutral through the purchasing of green power credits “Green Tags". REI Adventures states that it is the first US travel company to introduce this type of program. REI has pledged to be a climate neutral and zero waste to landfill company in 2020 focusing on the five areas of its business: green buildings, product stewardship, proper paper usage, reducing waste and energy efficiency.
REI has diversified its offerings into global adventure vacations though the REI Adventures branch which began in 1987. REI Adventures offers vacations for active travelers all over the world.
In 2006 REI started the Outdoor School in selected markets. The Outdoor School is a series of one day outings in the local area and in store classes. Offerings include mountain biking, road biking, kayaking, backpacking, rock climbing, outdoor photography, family hiking, snowshoeing and others. The current locations of the Outdoor School are the San Francisco Bay Area, Sacramento and Reno areas, the Los Angeles area, the San Diego area, Boston and New England area, New York Tri-State area, Philadelphia, Washington D.C./Virginia/Maryland area, Chicago area, Minneapolis area, Denver area, Atlanta area, Portland area, and Puget Sound area.