REI’s secrets to sustaining a beloved brand and touching grass

Host Bob Safian opens by contrasting the systems great founders build for their companies with the disconnected financial systems many use personally, then introduces Mary Beth Laughton, known as MB, REI’s president and CEO. She came from Nike in early 2025 to revive a retailer facing post-pandemic losses and internal discontent. The episode frames her central challenge as ensuring REI survives for another 88 years while remaining a healthy cooperative committed to its mission and values. Safian recalls REI’s former Soho store in Manhattan, including its much-loved bathrooms and the symbolic funeral people held after it closed. Laughton says she has always been outdoors-oriented, describing being outside as freeing, centering, and grounding; she now hikes regularly in the Pacific Northwest. When Safian asks whether urban customers who mostly use places such as Brooklyn’s Prospect Park count as serious REI customers, Laughton says REI welcomes everyone, from someone climbing a “14er” to someone visiting a local urban park. She cites REI-supported health studies suggesting that even 20 minutes outdoors can provide mental and physical benefits. REI’s mission is to connect people to the power of the outdoors, and its “green vests”—store employees with firsthand outdoor experience—are central to helping customers choose appropriate gear for their circumstances.

Laughton says she entered REI during a turbulent period for retail, with tariffs and union pressure adding to the company’s existing problems. Rather than immediately imposing changes, she prioritized listening and learning from employees, stores across the country, vendor partners, and the broader economic environment. Within her first six months, she worked with the leadership team to create a strategic plan called Peak 28. She says REI still had important strengths, but several warning signs demanded action. Member engagement was beginning to weaken, profitability had been poor for several years, and basic retail fundamentals needed attention. Her experience across different retailers helped her identify where REI needed to change while preserving what already worked. The cooperative structure makes REI different from a conventional public retailer, but it does not remove the need to make money. REI is privately held and has no shareholders or quarterly earnings calls, so Laughton and the board can focus more on sustainable, long-term growth. At the same time, REI must generate profit and cash flow because it is not a nonprofit. Laughton describes the goal as a reinforcing cycle: more profit creates more resources for REI’s purpose, while better member experiences strengthen the business.

Laughton explains that REI is the largest consumer cooperative in the United States, with 26 million members. A lifetime membership costs $30. Members receive benefits such as store classes, special offers, and discounted access through a new partnership with AllTrails. They also receive a 10% dividend on purchases each year, meaning members share in the proceeds of the business even though they are not technically shareholders. That structure shapes Laughton’s priorities. REI has to create strong experiences and benefits so members feel their membership was a worthwhile investment, while also maintaining a profitable operation. Members therefore hold the company to a high standard and feel entitled to challenge decisions because they are deeply invested in the cooperative’s identity. Safian asks how REI handles its stated commitments to community, sustainability, conservation, public lands, and access to the outdoors at a politically divisive moment. Laughton says REI supports those values through direct funding, behind-the-scenes work with policymakers, and its Cooperative Action Network, which encourages members to write to policymakers and government officials. She acknowledges that the company must navigate political risk but says REI will continue advocating for public lands because that is fundamental to its mission.

Safian asks about Laughton’s early public decision to apologize for REI’s previous support of Doug Burgum for Interior Secretary and to rescind that support. Laughton says the decision was difficult because she was new to the company and had not participated in the original choice. After examining the situation, however, she concluded that some positions Burgum supported were inconsistent with REI’s identity as a cooperative. Laughton publicly admitted that REI had made the wrong call. She says some people remained angry that REI had become involved at all, but others valued the transparency and vulnerability of acknowledging the mistake rather than defending it. Her stated lesson was that REI needs to listen more carefully to its members and avoid actions that conflict with the organization’s values. The conversation then turns to outdoor spaces as a way to bridge political division. Laughton calls access to public lands a nonpartisan opportunity for people to come together. She believes outdoor experiences can support mental, emotional, and physical health, while shared activities and conversations with REI’s green vests create a sense of community. Safian notes that this public stance was effectively Laughton’s first major CEO action: separating REI from a Trump administration cabinet nominee despite the potential political consequences.

Laughton stresses that REI is a retailer, not a public-service organization. Its roughly 200 U.S. stores remain important because customers value human interaction, but she says the company must make that service distinctive in a world where many purchases happen on phones and online. REI is consequently trying to make its digital experience feel more emotional and personal rather than merely transactional. One example is bringing green-vest expertise onto REI.com. Employees record product videos explaining what they like about particular items and why, using their own experience to make recommendations. Laughton says these videos receive strong engagement. She sees that lived expertise as an advantage that can travel across stores, websites, and apps. The same question applies to AI shopping agents and chatbots. Laughton says REI wants to be discoverable wherever customers shop, including chatbot interfaces, so the company remains in the consideration set even when customers are not on REI.com. That requires structuring REI’s expertise and product data so automated systems can capture and elevate it, while also giving customers reasons to visit REI’s own channels. She compares the current AI transition to the late-1990s dot-com boom: companies do not necessarily need to be first movers, but they must enter the game quickly enough not to be left behind. She accepts that AI-related costs may be part of doing business and says REI must embrace the technology responsibly rather than “put our head in the sand.”

A union-led boycott earlier in the year involved about 70,000 REI co-op members and targeted an REI sale. Laughton says the company is bargaining with its unions in good faith but cannot discuss the details of negotiations. She calls the boycott unfortunate because a sale can increase revenue, and stronger business performance can put more money into employees’ pockets through higher bonuses. She recognizes the emotional stakes but says REI must continue listening while also making the choices required to remain profitable and survive another 88 years. Safian asks whether REI members expect more from the company than customers of ordinary retailers. Laughton agrees: members feel invested in the cooperative and understandably ask more of it, although REI cannot provide everything they want. She rejects the idea that REI deliberately preserves shopping “friction.” The company tries to remove friction, but it also believes human interaction and the green vests’ lived experience provide value that AI cannot replicate because AI has never actually climbed a mountain or taken a hike. Laughton draws specific lessons from earlier roles. At Sephora, she helped grow the digital business from $250 million to more than $1 billion during the rise of YouTube and mobile shopping, learning to anticipate customer shifts and become a fast follower before being left behind. At Athleta, she learned that growth and mission can coexist; the company embraced inclusive sizing even though it raised product costs without raising customer prices. At Nike, she learned to protect the experiences that make a brand special. She says the central REI challenge is combining those lessons to create a sustainable co-op without losing its heritage, mission, or values.