How the Pandemic Could Change Retail Headquarters

How the Pandemic Could Change Retail Headquarters
Multiple HQ locations could serve to reduce the retailer’s carbon footprint, reflecting a broader trend.

REI Co-op wants to redefine the corporate headquarters concept — a signal of how this year of the pandemic is changing the thinking of retailers.

The seller of outdoor gear and apparel said Tuesday that it is trying to sell its newly completed corporate campus in the Spring District neighborhood of Bellevue, Washington. Instead, REI prefers what it calls a less centralized approach to its headquarters presence in the Seattle area.

More specifically, REI plans to shift from a single headquarters to multiple locations spread across the region. Doing so could better enable remote working and allow more REI employees to live — and work — outside of the Puget Sound area.

As well, multiple locations could serve to reduce the retailer’s carbon footprint — reflecting a larger trend in retail (including with Amazon) and no doubt giving REI more credibility among outdoor enthusiasts. Sustainability, already a hot trend before the pandemic, has gained significant energy as the outbreak forced retailers and customers to rethink the consumer, supply chain and work-from-home experiences.

"The dramatic events of 2020 have challenged us to reexamine and rethink every aspect of our business and many of the assumptions of the past. That includes where and how we work," said REI President and CEO Eric Artz. "As a result, our new experience of 'headquarters' will be very different than the one we imagined more than four years ago."

As the pandemic raged, the co-op transitioned to nearly 100 percent remote work for its headquarters staff in early March. REI originally announced plans for the new headquarters in 2016, to be built on an 8-acre site in a developing, transit-oriented neighborhood called the Spring District. Construction began in 2018 for an intended mid-summer 2020 move-in date.

"[This year] we learned that the more distributed way of working we previously thought untenable will instead unlock incredible potential," said Artz. "This will have immediate, positive impacts on our ability to attract and retain a diverse and highly skilled workforce, as we continue to navigate the impacts of the COVID-19 pandemic and beyond."

While the decision to move away from a traditional headquarters model was motivated by recent learnings and a desire to create more flexibility for employees, REI said, the sale would also have financial benefits for the co-op.

The co-op was among the first retailers to proactively close all its retail stores in early March and one of the last to fully reopen, under stringent health and safety guidelines. The co-op undertook a number of cash preservation measures throughout the spring, including tighter inventory management, elective pay cuts by Artz and the board of directors, reductions in headcount and focusing around a streamlined set of priorities. These measures both stabilized the co-op, and allowed REI to invest in customer and staff-facing programs and innovations, as the co-op community adapted to a "new normal."

The sale of the Spring District campus would enable important investments in customer innovations, REI's network of nonprofit partners, and the co-op's carbon goals.

"I am confident that the sale of the Spring District campus would have a positive impact on REI's future—and yours," Artz told employees on Tuesday. "This year has shown us our home is not a building. Our home is wherever we find ourselves doing our best work, pursuing our outdoor passions, serving our communities. Serving each other. That is what we will build around as we move forward—and as we accelerate into what's next."

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