REI reports lower profit
4 percent decline comes amid round of layoffs
Has outdoor-gear retailer REI hit a bump in the road? Kent-based REI recently reported a 4 percent decline in its profit last year amid tepid sales growth.
REI, which posted annual results on its website without any corresponding press release, gave no explanation for the profit drop.
In a message to customers, REI Chief Executive Officer Sally Jewell said a total of $104 million will be returned to 5.1 million active members, representing, as usual, 10 percent of their eligible purchases.
REI’s sales rose 7 percent last year to $1.9 billion, while its profit dropped 4 percent to $29 million. Sales growth was down from 8 percent the year before and 14 percent in 2010.
Jewell, who’s awaiting Senate confirmation to lead the U.S. Department of the Interior, said REI redoubled its efforts to sell compelling new products, including an array of items developed in-house. The 129-store chain also opened a handful of new locations nationwide and equipped its salespeople with mobile checkout devices to cut down on long lines, Jewell said.
REI last month confirmed reports of layoffs at its headquarters and various stores, saying a “limited number” of employees were let go in response to changing business needs. It did not disclose the exact number of layoffs.
The company also said it planned to hire more employees in the coming months, promising a “net increase” in headquarters jobs by year’s end. REI currently has about 1,100 headquarters employees.
Meanwhile, President Barack Obama has nominated Jewell to become Interior’s next secretary. REI Board Chairman John Hamlin said a national search for her replacement won’t begin until she is confirmed, possibly later this month.
“The board is enthusiastic and supportive of her confirmation, as we know she would bring great leadership, a balanced approach to complex issues and her lifelong passion for the outdoors to Washington, D.C.,” Hamlin wrote in a message to REI customers online.