REI, Cotopaxi layoffs a sign of a tough 2024 for the outdoor industry?

The height of the COVID pandemic brought with it immediate lifestyle changes across the globe, and I need not go through the entire laundry list as there was not a soul who wasn’t impacted. As reducing exposure to others became paramount so, too, did an obvious pinch on how people traveled and recreated – packing hundreds of folks on airplanes went against everything ‘social distancing’ tried to accomplish, after all, if other countries would even allow those planes full of people to come visit.

It became the perfect storm for most outdoor retailers. People couldn’t fly for long trips. Folks quickly realized that if they weren’t going to be able to hang around with others in foreign locales, spending time in nature was better than being stuck at home – and, to no surprise, that the nature many had overlooked was pretty damn beautiful. Nature requires few, if any pre-planned reservations, either, so people could be just about as spontaneous as they wanted to be in getting out into nature, be it for hikes, camping, backpacking, or whatever.

That hyperfocus played out in spades for REI, in particular. The co-op distributed a record $234 million back to its members after posting a historic $3.7 billion in revenue, a mark that was 36% higher than their 2020 one. Their fledgling used-gear exchange saw a rise of 86% year over year, meaning customers were shopping at all ends of the spectrum at the massive outdoor co-op retailer in attempts to be prepared for their newfangled life of outdooritude.

I had a nasty bout of COVID that hit right after Christmas, as did everyone in my household. It’s very much still real, and very much still there, even though vaccinations have helped to ease the worst-case impact of each strain. That said, restrictions on what we humanfolk can and cannot do have long since begun to ease, and traveling both domestically and internationally has begun to mimic pre-pandemic expectations. On top of that, most every stock market index has reached record heights, and that paired with people still feeling like they missed out on a couple of years of would-be travel has turned the gaze of the masses towards recreation that’s more pre-planned, more complex than simply escaping to the woods.

The trend is not necessarily new. Almost exactly one year ago, REI began the charge of laying off personnel from their Seattle headquarters, and followed suit with another major round of layoffs and their HQ today.

While REI is the flagship retailer for most major outdoor-centric brands, they also manufacture and sell products under their own label. Those have been pinched as much as their ability to sell the products of other brands, though the other brands are right there in the very same struggle. Salt Lake City-based Cotopaxi, for instance, laid off 22 full-time employees just last week as they attempt to ‘reorganize’ for a 2024 that – as is priority – is as profitable as it can be for the company. Those announcements came on the heels of Newell Brands, the parent company of brands like Coleman and Marmot, announcing in early January that they’d lay off roughly 7% of their employees for similar reasons.

While there is an obvious pullback expected from outdoor retailers in terms of how many goods they’ll be able to sell in 2024, I don’t think there’s a one-for-one that will follow in the reduction of folks recreating in the outdoors. After all, just because you bought a tent and sleeping bag in 2021 doesn’t mean you can’t still use it in 2024, it just means you may not be in the market for buying a new one. Yes, the freedom of movement will inherently mean people opt to travel the way they could in the before times, but this news is no death knell of the outdoor recreation industry as a whole.

For retailers looking to sell new goods, though, it does appear that 2024 is going to be a bit of a tough year, and as always, it’s the employees taking it on the chin in favor of the Big Bottom Line.