REI's Quiet Exit From the Northeast Signals a Deeper Crisis for Co-op Retail

REI's Paramus, NJ location closed permanently in January — the first of three Northeast stores the co-op is abandoning in 2026. With $156 million in net losses last year, a declining revenue base, and ongoing union battles at multiple locations, REI is navigating a challenge that's about more than foot traffic: it's about whether the co-op model itself can survive the current retail environment.

The outdoor gear co-op REI closed its Paramus, New Jersey store permanently on January 8 — after 14 years in the market — without much fanfare. Two more Northeast locations are scheduled to follow later this year: its SoHo flagship in Manhattan's historic Puck Building, which opened in 2011 as REI's first New York City location, and its Boston store.

The closures are a quiet retreat from one of the country's most expensive retail markets. And taken together with REI's broader financial picture, they suggest the co-op is in the early stages of a significant strategic reset.

The Numbers Are Difficult

REI reported a net loss of $156 million in fiscal 2024, its second consecutive year in the red — though an improvement from the $311 million loss in 2023. Revenue fell 6% in 2024 to $3.53 billion. Retail Dive reports that former CEO Eric Artz acknowledged "four quarters of decline — and that trend has been worsening" heading into 2025.

The explanation is structural, not merely cyclical. The pandemic outdoor boom pulled forward years of consumer demand. Millions of Americans bought hiking boots, camping gear, and cycling equipment between 2020 and 2022. They have that gear now. And as Fox Business reported, when essential prices rise — groceries, energy, housing — outdoor specialty is one of the first discretionary categories to soften.

REI still opened six new stores in 2025 in other markets, including Colorado, California, and New York's Amherst. The Northeast exits aren't an overall contraction — they're a geographic recalibration, pulling out of high-rent, low-performing urban locations while continuing to build in more favorable markets. But the company framing — "as markets and customer needs evolve, we must adapt" — does a lot of work to obscure the financial reality.

The Co-op Paradox

REI's structural challenge is one that conventional retailers don't face. As a consumer cooperative, REI is accountable to its members in a way that public companies aren't — members elect the board and expect both product value and shared values from the brand. That creates pressure to keep prices competitive, deliver dividends, and maintain a brand identity grounded in environmental and community commitment, all while running physical stores in increasingly expensive markets.

The union dimension adds complexity. REI has faced active organizing at multiple locations, and as we reported earlier, the company has been battling NLRB complaints related to labor practices. Outdoor specialty peer Orvis is navigating similar headwinds, announcing the closure of 36 locations — 31 stores and 5 outlets — citing rising tariffs and shifting consumer behavior. The outdoor category isn't just in a downturn; the retailers that built their identity around it are being forced to reckon with whether their store footprints were ever sustainable.

What Comes Next

The SoHo store's closure is the most symbolic. A 39,000-square-foot flagship in Manhattan's SoHo neighborhood represents everything REI aspired to be at its peak: an urban outdoor destination for high-income, experience-oriented consumers. Closing it is not a statement about outdoor retail's future — it's a statement about the cost of maintaining premium real estate in premium markets when the underlying financial model is under pressure.

REI has the brand equity and the membership base to navigate this reset. But the path through involves making harder choices about where and how to operate, not just which stores to close. The Northeast retreat is the visible part. The harder work is figuring out what kind of company REI can profitably be on the other side of the outdoor boom's unwinding.