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Tag: coop

  • Exclusive: REI’s CEO Shares the Retailing Co-Op’s Growth Strategy

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    Hello and welcome to Modern CEO! I’m Stephanie Mehta, CEO and chief content officer of Mansueto Ventures. Each week this newsletter explores inclusive approaches to leadership drawn from conversations with executives and entrepreneurs, and from the pages of Inc. and Fast Company. If you received this newsletter from a friend, you can sign up to get it yourself every Monday.

    When Mary Beth Laughton became president and CEO of Recreational Equipment Inc. (REI) earlier this year, she inherited an organization with a rich heritage: REI was founded in 1938 by Lloyd and Mary Anderson, who joined some fellow outdoor enthusiast friends to buy ice axes that were only available in Europe at the time. Since then, REI has retained its status as a cooperative (co-op)—a $30 lifetime membership fee unlocks member rewards, discounts, and free standard shipping—and now boasts 25 million lifetime members, 195 stores, and 14,000 employees.

    Laughton also came into a company that was losing money and ceding ground to competitors. REI reported a net loss of $156.4 million in 2024; revenue fell 6.2 percent to $3.53 billion.

    To reverse the slide and position the brand to become “the most trusted retailer for people who love the outdoors,” Laughton last week unveiled a multi-year strategic plan that aims to leverage REI’s strengths while improving retail and membership experiences. She spoke exclusively with Modern CEO about the plan.

    Evolve, evaluate, elevate, engage

    “It’s not about necessarily reinventing the co-op,” she says of the strategy. “It’s about unleashing these assets that we already have and make us unique. But the reality is that we need to drive profit so that we can reinvest in communities and employees and back into the business.”

    The plan calls for REI to evolve its culture, evaluate its inventory to make sure stores are stocked with a comprehensive and current product assortment, elevate its customer service and experience, and engage members.

    “We’re talking about being a more connected, focused, and trailblazing culture,” she says, putting customers at the center, doing fewer but more high-impact projects, and moving faster. She adds: “If we don’t get the culture right, the rest of the strategic pillars aren’t going to matter.”

    To combat competition from big-box retailers such as Dick’s Sporting Goods, e-commerce giant Amazon, and newer brands with their own stores such as Cotopaxi, Laughton and her team are focused on differentiating the REI shopping experience. They are doing so with products that appeal to casual and expert outdoorspeople alike, while tapping into the knowledge and insights of REI’s 9,000 retail employees, known as “Green Vests” in a nod to the uniform they wear. “They have a lot of passion for the outdoors; they can offer a lot of guidance and expertise,” she says. She’s also looking for ways to “bring the Green Vest online”—weave expert advice throughout the online shopping experience.

    Those Green Vests also have their own expectations of REI. Employees at 11 stores have voted to unionize, an effort that began in 2020 amid concerns about worker safety during the pandemic. Earlier this year, REI and the unions that represent the workers reached an agreement that paves the way for contract negotiations. “We’re showing that we want to make progress, and we’re working collaboratively to get there,” Laughton says.

    New vision, solid roots

    Laughton is well positioned to help REI get crisp on the fundamentals of retail and online shopping. Before joining the co-op, she ran Nike’s direct-to-consumer (DTC) business globally, which included its 6,000+ stores, e-commerce site, and more (she spent nearly a decade at the footwear and apparel giant earlier in her career). Before Nike, she was president and CEO of Athleta, spent more than eight years at Sephora, and got her career start as a McKinsey & Company consultant.

    In the same way that Athleta expanded its customer base with workout gear in a range of sizes, as well as styles suitable for wear outside the gym or yoga studio, Laughton sees an opportunity to make sure REI is stocked with items that make people feel comfortable and stylish while hiking or skiing. “We have a thousand brands, and we can mix and match and outfit people in a way that they actually want to dress for the outdoors,” she says.

    But don’t expect the co-op to stray too far from its roots. “We want to be on-trend, but we also want to make sure that we’re not trendy,” she says. “Because that’s not REI.”

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    Stephanie Mehta

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  • I’m a New Yorker. My wife wants to buy a $700,000 co-op. What could go wrong?

    I’m a New Yorker. My wife wants to buy a $700,000 co-op. What could go wrong?

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    I’ve lived in the city for the last four decades, but I’ve mostly been renting. My priorities are a three-bedroom apartment with easy access to grocery stores and the subway in a nice, quiet neighborhood. 

    But housing prices are insane in New York City. I want a house, but my partner is looking at a co-op. And for my price range of $700,000, the best options I can find are co-ops. 

    I plan to buy the home and live in it, and am not looking to rent it out in the foreseeable future. The home is for my family of four. 

    So my question is this: Is a co-op a good idea? 

    New York Native 

    ‘The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.

    Do you have a question about buying or selling a home? Do you want to know where your next move should be? Email Aarthi Swaminathan at TheBigMove@marketwatch.com.

    Dear New Yorker,

    For those unfamiliar with what a co-op is, it’s short for housing cooperative. A cooperative is a legal group that owns one or more residential buildings, and the residents are members of it. The cooperative can comprise apartments, but it can also be made up of single-family homes. Residents who purchase a co-op unit don’t own the unit itself and have a share in the common areas. Instead, they’re purchasing a share of the overall property, and that share gives them the right to live in a specific unit. 

    When you look for homes, you may find that co-operative apartments are cheaper than comparable condominium units in the same city, or than single-family homes. And with the median home price in Manhattan being $1.2 million, according to Douglas Elliman, a co-op apartment for $700,000, if you find one, may sound like a good deal. 

    But, as you already know, for a three-bedroom, you’ll be quickly priced out of Manhattan. The real-estate brokerage said that a three-bedroom co-op apartment on the island would run about $2.23 million. And only 12% of co-op sales were three-bedroom apartments, versus 38% for one-bedrooms. 

    You will find deals further out. In Queens, Douglas Elliman said, the median price of a condo unit was about $720,000 in the second quarter of this year, and a co-op apartment cost roughly $310,000. 

    But there are drawbacks that you should consider, if you haven’t already.

    First of all, you don’t technically own your co-op apartment as you would own an apartment in a condominium. Co-ops also charge you fees, which can run $4,000 a month, as Streeteasy observes, depending on the size of the unit, and so on. Applying for co-op ownership can be a painful process. Renting them out (if you can do that at all) will be hard, since the renter will have to go through the co-op board.

    Selling is similarly tough, as the prospective buyer needs to be approved by the board. A board can require that a buyer put a lot of money up front, as Curbed explains. Ultimately, you may end up with less equity over time as experts say co-ops don’t typically appreciate at the same pace as condominium units or single-family houses or town houses. 

    Co-ops are also very “secretive,” as the Guardian put it, with little transparency into how boards make their decisions about potential buyers and renters. According to data from the New York City Department of Housing Preservation and Development, there were 3.6 million housing units as of 2021, out of which 832,000 were in a condominium or a co-op. 

    That being said, co-ops aren’t all that bad. 

    The important thing to remember is if you’re just looking for an affordable place to live with your family, the numbers may very well make sense. 

    Co-op apartments are priced lower than units in condominiums, as already mentioned, so you’re still able to find good options with easy access to the subway and other urban amenities. You can stop dealing with rent hikes from your landlord and have a property to call your own. And, ultimately, you also live in a building with many long-term tenants versus living among neighbors who change every year. There can also be a greater sense of community in a co-op vs. a condominium as co-op residents may tend to change less frequently.

    So you have to weigh the pros and cons. If you’re looking for a more affordable entry into New York City real estate, and have the stomach to navigate the co-op process, then, by all means, apply for that apartment your wife liked.

    Bottom line: Just be sure you won’t want to move in a couple of years from now because you likely won’t be able to rent it out for long, if at all.

    By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

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