Although brick-and-mortar stores were once the main destination for shopping and a sign of a retailer’s success, that’s no longer the case. Consumer habits have evolved, and online shopping has risen in popularity, changing the industry dramatically.
To stay competitive in a volatile economy, many companies are reducing their physical footprint, closing multiple locations and reinvesting in more profitable areas to avoid the much-dreaded loss of an entire business.
However, the most recent wave of store closures by a well-known outdoor retail chain will leave hundreds of people without convenient access to its stores.
REI has revealed plans to close three locations across its U.S. Northeast markets in 2026. These include its flagship store in New York City’s SoHo neighborhood, one in Paramus, New Jersey, and another in Boston, Massachusetts.
REI store closing timeline
- 303 Lafayette St, New York, NY: Closing in late 2026
- 2200 Bergen Town Center Dr., Paramus, NJ: Closing first quarter of 2025
- 401 Park Dr. Ste 103, Boston, MA: Closing in late 2026
REI opened its flagship store in 2011 in the Puck Building, making its first location in New York City. This massive 35,000 square-foot store is in one of the most expensive neighborhoods of New York City and has been a historic landmark since 1885.
With its closure, the company would be saving millions in operating costs, which could be redirected toward future store openings or digital investments.
While REI operated around 195 stores nationwide, most cities only have one location, as seen on its website’s store locator. With the upcoming closures in New York City, Paramus, and Boston, many customers will lose convenient access to a nearby REI store.
In addition to the significant job losses these shutdowns will bring, store closures reduce customers’ access to products and services, forcing them to travel farther or rely solely on online shopping. The loss of in-store experiences can reduce traffic, weaken brand loyalty, and potentially change shopping habits.
REI shifts its strategy
These store closures come after REI exited its Experiences business in January, which includes adventure travel, day tours, and classes. The decision led to the layoffs of 180 full-time employees and 248 part-time guides.
Justifying the move, the company noted that the Experiences program had become unsustainable, serving only around 40,000 customers, or less than 0.4% of REI’s total customer base, in 2024.
Related: TJ Maxx closes one of its flagship locations
“The reality is a thriving co-op requires a sustainable economic model that is capable of investing at the appropriate level to fully fund our most critical strategic ambitions,” said REI former CEO Eric Artz in the announcement.
“When we look at the all-up costs of running this business, including costs like marketing and technology, we are losing millions of dollars every year and subsidizing Experiences with profits from other parts of the business. Even at our peak in 2019 — our best year for Experiences ever — we did not generate a profit.”
By discontinuing Experiences, REI aims to reduce losses and redirect funds toward more profitable areas that drive long-term growth.
REI faces financial challenges
REI has struggled with financial pressures in recent months. In its 2024 Impact Report and Financials, the company reported a 6% drop in net sales compared to the previous year.
“The last few years have been challenging, not just for REI but for the greater outdoor industry,” said REI CEO Mary Beth Laughton in a statement. “And yet I remain hopeful.”
These declines led REI to launch a three-year turnaround strategy called “Peak 28: Ascending Together” in September.
The plan focuses on strengthening the company’s culture, improving product assortment, enhancing customer service and experience, and updating its membership program.
Laughton acknowledged that the transformation would not be easy and warned about upcoming harsh decisions for the betterment of the company.
“Making these shifts will not be easy; they’ll require us to fundamentally transform, make difficult choices and evolve the way we work over the next few years,” said Laughton in a statement.
Related: Walmart announces unexpected store closure
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