New REI chief executive settling in, adopts a more outdoorsy look

Three months after taking the helm at REI, Jerry Stritzke looks every bit the part of CEO at the Northwest’s popular outdoor-equipment retailer.

Stritzke, 53, walks the grounds of REI’s Kent, Wash., headquarters sporting a three-day stubble and none of your typical CEO attire. Jeans, flannel shirt and Patagonia vest have replaced the suit and tie he wore as president and chief operating officer at posh New York-based handbag-maker Coach.

The Stillwater, Okla., native describes himself as an avid outdoorsman – a guy who spends his summer vacations fly-fishing and mountain climbing, skis and snowboards in the winter, and now bikes to work from his new home on Mercer Island.

While his appointment last fall to REI’s top post seemed something of a head-scratcher, Stritzke said the opportunity to combine his retail expertise with a passion for the outdoors “was really a dream come true.”

He gives off the impression that selling tents and bikes, not pricey purses, is what he was meant to do all along.

“We do a lot of different things for work,” he said of REI’s core customers. “But our love for the outdoors is a constant through our lives, and that’s been true for me.”

Stritzke is the seventh CEO in REI’s 75-year history, replacing Sally Jewell, who joined the Obama administration as secretary of the interior last spring.

Jewell, a former banker, led REI through the recession as CEO for eight years, nearly doubling its annual sales from $1 billion in 2005 to $1.9 billion in 2012.

Stritzke, a lawyer by training, brings a different background to REI. He was the No. 2 executive of publicly traded Coach for more than five years. Before then, he held a number of top posts at Limited Brands, including a stint as chief operating officer of Victoria’s Secret.

REI, which was founded in 1938 as a member-owned co-op, has 132 stores in 33 states and more than 5 million active members. Stritzke sees competition mounting from retailers as diverse as Amazon.com, Cabela’s and Nordstrom, and one of his responses is to mull more flagships like REI’s big downtown Seattle store.

REI Board Chairman John Hamlin said Stritzke was chosen for his long history in retail, strong leadership skills and “passion” for the outdoors.

Hamlin also rejected the notion that Stritzke is an odd cultural fit because he comes from fashion mainstay Coach.

“If you looked at Sally’s background, people would have said, ‘Wow, why did you get a banker to come in and run the co-op?’ The answer would have been, ‘We needed the financial stability,’ ” Hamlin said.

“We now strongly believe we need the retail expertise, and we’re seeing that value from him already,” Hamlin said.

Stritzke said he has been in listening mode since his Oct. 1 start date and will lay out his priorities in the next few months.

But he already has made some changes. One of his first moves as CEO was to launch a national search for a chief marketing officer, a new position.

Stritzke said he’s asked his leadership team to consider new store concepts and a separate strategy for more flagships. He praised REI’s largest stores in Seattle and Denver and another flagship in Manhattan’s SoHo district.

“They do an amazing job of telling the REI story,” he said in a recent interview at REI headquarters. “They’re incredibly successful, and I actually believe there’s an opportunity for us to do more of that.”

Stritzke takes over REI at a time of fierce competition from the likes of Amazon, Cabela’s and Dick’s Sporting Goods. Even Nordstrom sells North Face apparel.

“Increasingly, we’re seeing a number of retailers try to take a piece of that outdoor experience and integrate it into their stores,” he said. “What makes REI unique is it’s at the core of what we do. That puts us in a position of amazing authenticity, and we’re able to tell that story in a very different way.”

REI’s annual profit declined 4 percent in 2012 amid tepid sales growth. Last year’s results won’t be announced for a couple more months.

Stritzke counts among his key accomplishments at Coach helping to expand the company’s business in China after it was bought back from a distributor in 2008.

“A lot of that was telling a brand story, building a flagship, creating a presence and really engaging a customer base,” he said.

Hamlin said Stritzke can use his brand-building experience to make REI better known outside of its long-established markets on the West Coast.

More than a third of its stores are in California, Oregon and Washington. REI plans to open at least seven new stores in 2014, up from five last year. Its newest markets include Jacksonville, Fla.; Kansas City; and Columbus, Ohio.

While REI has a “towering presence” in the Pacific Northwest, it’s not exactly a household name everywhere, said Sandeep Krishnamurthy, dean of the University of Washington-Bothell School of Business.

“They have to figure out if they want to be a national player or a niche regional player,” he said. “Right now, they’re very much a West Coast retailer.”