Rei Company Overview
Can REI Climb Higher with Networking and the Internet?
With an old-fashioned sensibility and a forward-looking embrace of networking and Internet technology, Recreational Equipment, Inc. (REI) occupies a distinctive position in the retail market. Selling gear and clothing for outdoor recreational activities, REI operates 82 stores throughout the United States, as well as 2 stores on the Web and an adventure-themed travel service. Together, these entities recorded over $1 billion in sales during 2005.
The company was started in 1938 as a cooperative by mountain climbers Lloyd and Mary Anderson and a group of associates to acquire quality climbing gear and other outdoor recreational equipment at affordable prices. Despite the significant expansion and modernization, REI remains a cooperative, with more than 2.8 million members. REI pays out approximately 85% of its total income to cover rebates to cooperative members equaling 10% of their purchases. For 2005, members received a total $43 million in refunds, with over $7 million left unclaimed. Because REI is not a publicly-traded company, it does not have to base its performance on meeting short-term earnings targets and can take a longer-term view of its technology investments. In the history of the company, it has never failed to return a dividend to members. REI has appeared on Fortune magazine 's list of the 100 Best Companies To Work For every year since 1998, reaching number nine in 2006.
REI was one of the first retailers to investigate the potential of e-commerce, and by 1996, REI was already doing business over the Web. Two years later, the company 's Web store had become a profitable venture. Now, REI.com and REI-OUTLET.com combine with REI 's catalog phone sales to account for 17 percent of the company 's total annual sales revenue. More importantly, REI has successfully integrated an e-commerce channel into its business without hurting the traditional channels, retail stores and catalog sales.
With an old-fashioned sensibility and a forward-looking embrace of networking and Internet technology, Recreational Equipment, Inc. (REI) occupies a distinctive position in the retail market. Selling gear and clothing for outdoor recreational activities, REI operates 82 stores throughout the United States, as well as 2 stores on the Web and an adventure-themed travel service. Together, these entities recorded over $1 billion in sales during 2005.
The company was started in 1938 as a cooperative by mountain climbers Lloyd and Mary Anderson and a group of associates to acquire quality climbing gear and other outdoor recreational equipment at affordable prices. Despite the significant expansion and modernization, REI remains a cooperative, with more than 2.8 million members. REI pays out approximately 85% of its total income to cover rebates to cooperative members equaling 10% of their purchases. For 2005, members received a total $43 million in refunds, with over $7 million left unclaimed. Because REI is not a publicly-traded company, it does not have to base its performance on meeting short-term earnings targets and can take a longer-term view of its technology investments. In the history of the company, it has never failed to return a dividend to members. REI has appeared on Fortune magazine 's list of the 100 Best Companies To Work For every year since 1998, reaching number nine in 2006.
REI was one of the first retailers to investigate the potential of e-commerce, and by 1996, REI was already doing business over the Web. Two years later, the company 's Web store had become a profitable venture. Now, REI.com and REI-OUTLET.com combine with REI 's catalog phone sales to account for 17 percent of the company 's total annual sales revenue. More importantly, REI has successfully integrated an e-commerce channel into its business without hurting the traditional channels, retail stores and catalog sales.