Union Outcry Over Retailer’s Surprising Closure Plan

Out of Business sign on closed store shutters — STORES CLOSED

REI’s decision to close iconic stores in major urban centers raises questions about the future of retail and its impact on local economies.

Story Overview

REI announces closures of three major Northeast stores by 2026.
Closures are part of the strategy to adapt to declining sales and market changes.
Unionized workforces express concerns over job security.
Broader implications for the outdoor retail sector and urban economies.

REI’s Strategic Shift Amidst Economic Pressures

REI Co-op announced plans to close three significant retail outlets in the Northeast: Paramus, NJ, Boston, MA, and New York City, NY. This decision, expected to be fully executed by late 2026, is part of a strategic pivot to address financial pressures and shifting consumer behaviors.

The closures come as REI grapples with declining sales, having reported a 6.2% decrease in 2024 and a net loss of $156.4 million. The decision reflects a broader trend of contraction within the outdoor retail sector.

REI to close three Northeast stores in 2026 as it adapts to shifting markets and customer needs: report https://t.co/I2Ayn7f8To

— FOX Business (@FoxBusiness) October 15, 2025

REI’s CEO, Mary Beth Laughton, emphasized the necessity of these “tough choices” to secure the co-op’s long-term success. The strategy, dubbed “Peak 28: Ascending Together,” aims to streamline operations and focus on more profitable locations.

As part of this plan, REI had already closed its Experiences division earlier in 2025 and sold four warehouses in a sale-leaseback deal. The closures also align with industry-wide shifts, as competitors like Orvis and Eddie Bauer also reduce their retail footprints.

Union Concerns and Labor Dynamics

The closures have sparked significant concern among unionized employees at the New York and Boston locations. The New York City store was the first REI outlet to unionize in 2022, setting a precedent for others like Boston.

The union has expressed dissatisfaction with the lack of advance notice and the potential impact on ongoing contract negotiations. Despite these challenges, not all affected stores are unionized—Paramus, for instance, is not—highlighting varying degrees of leverage in discussions with management.

Union representatives are calling for transparent negotiations to secure fair outcomes for workers. The closures underscore the tension between REI’s cooperative values and the corporate rigor necessary for financial sustainability. Observers also note the political dimension, as scrutiny of labor practices and union relations at REI intensifies.

Impact on Urban Centers and Retail Trends

The closure of these flagship urban stores signals a shift in retail strategies, with implications for urban economies. High operational costs and evolving shopping patterns have put pressure on large-format retail outlets.

The Paramus store’s closure, for instance, involves a $25 million property sale, with redevelopment plans for a mixed-use housing and retail space underway. Such transformations reflect broader changes in urban retail environments.

Experts suggest that the contraction in the outdoor retail sector is a response to post-pandemic demand normalization and increased competition. As REI and other retailers navigate these challenges, the future of large urban retail stores remains uncertain.

These closures could prompt other industry players to reassess their strategies, potentially leading to further consolidation in the sector.