It was supposed to represent the future of the power: in 2018, REI broke ground on a corporate headquarters intended to embody its company culture. The eight-acre campus, in the Seattle suburb of Bellevue, was imagined as a playground of outdoor amenities, including a flame crater and a blueberry moras. Sleek garage-style openings would give air into the office, while courtyards blooming with native bushes would serve as alfresco conference rooms. The Wall Street Journal called it “the most outdoorsy HQ ever.” Fast Company joked that REI was improving “summer camp for grown-ups.” Move-in was slated for summer 2020.
But now the future of the department may be no agency, and instead of taking up residence in Bellevue, REI is responding to the pandemic by set its never applied, nearly finished HQ up for sale for the purposes of an undisclosed summing-up. “The dramatic events of 2020 have challenged us to reexamine and rethink every aspect of our business and many of the presumptions of the past, ” CEO Eric Artz told works in a video call last Wednesday.
Coming as it does after months of cuts–REI laid off approximately 300 corporate works in April and 400 retail employees in July–the decision could be a sign that the company needs to raise cash to retain its remaining personnel. Or the sharp centre could be an indication that REI, the first major outdoor retailer to follow in the footsteps of Facebook and Twitter by proclaiming remote part a central part of its future, is thinking a stair ahead of its peers.
Most likely, there’s truth in both readings. In an interview with Outside, REI’s chief consumer officer, Ben Steele, underscored the strategic benefits of the decision while acknowledging the need to recoup the spring’s losses. “It’s important to replenish the balance sheet so that we can be prepared for the squalls ahead, ” he says.
REI projected in May that it would suffer a 30 percent drop in revenue compared to the previous year. Since then, most of its 162 storages have reopened, and people driven outdoors in search of safe merriment “ve created” what Steele calls “unprecedented demand” for everything from crafts to bicycles to camping paraphernalium. Though a strong summer won’t amply make up for a spring of what outdoor-industry professionals told Outside were “jaw dropping” loss, REI has revamped its financial projections in a more optimistic direction. “We exited from asking questions about what we needed to do to stabilize to asking what decisions we can attain to help us build our future, ” Steele says.
That future will benefit from an influx of capital whenever REI sells its headquarters, he says. Several purchasers, including Facebook, are reportedly interested, according to the Seattle Times. REI hasn’t announced what it spent to build its offices and won’t comment on a possible sales price other than to say that the company expects “a positive return on our four-year investment.” It seems fair be questioned whether the new age of remote production might be a less than ideal time to placed a corporate campus on the market, but Steele says that REI “will look for and expect premium pricing.” In the years to come, the company envisages permitting employees to “flex” between labor remotely and travelling to one of three smaller satellites around the world in the Seattle area.
Some of the savings from downsizing will be directed toward meeting the brand-new forms of demand that the pandemic has brought into play. “As a lot of shopping and transactional demeanor moved online, we’ve seen places where we need to improve, ” Steele says. “REI is known for its in-store expertise and experience, so we’re thinking about things like virtual outfitting to see: Can you have that know online? Curbside pickup is not something that we identify going away–people like the accessibility. The report contains modes we want to invest to prepare that better for customers and likewise for employees.”
It’s also impossible to say how far away the post-pandemic future remains–another reason that REI may be win the privilege move by unloading an expensive resource. “There are a lot of uncharteds in the next year or two, ” points out Jessica Wahl, executive director of the Outdoor Recreation Roundtable trade association. Even if demand for outdoor paraphernalium is high , no one knows sure as shooting how the pandemic will continue to depress spending power or disrupt the supply orders that retailers rely on for produces. “Companies are drawing budget parts that are not indicative of their health today but are setting them up for success if that state alters, ” Wahl says. “You have to plan for what it looks like if things get really bad.”
With remote work the only option for numerous industries at this time, it’s not hard to imagine that other outdoor retailers may soon follow REI’s example. “REI is a leader in our industry, ” says Lise Aangeenbrug, executive director of the Outdoor Industry Association. “Any time they make a decision like this, it affects everyone, including their marketers, which is able to recollect, Well, if REI did this, should I? ”
REI’s plan is on trend with the future of office work that experts across numerous provinces have begun to predict. In a recent segment for the Harvard Business Review, a group of researchers at the design and pattern house HLW argued that companies should seek ways to symmetry the profits of the remote work–increased flexibility, opennes from commuting–with the fact that “people will still need places where they can come together, connect, build relationships, and develop their careers.” The writers propose that satellite powers represent an ideal compromise, both because their big size foundations close collaboration and because, “from a resilience view, ” they cater more places where people can work through natural disasters, capability outages, and other disruptions.
Ultimately, Steele argues that instituting resilient programmes vis-a-vis geography might fit REI’s culture better than any headquarters, even one created with a blueberry quagmire. “We’re a national organization, and life outdoors appears differences between, say, Atlanta than it does in Seattle than it does in Minneapolis or L.A ., ” he says. By necessity, the armory in any opened REI store indicates the natural terrain of the place where it’s located, but the company’s corporate works have never been likewise dispersed. Steele points out: “To have that simulation unfold into HQ is an interesting possibility.”
Read more: outsideonline.com
