The move will cost 145 employees their jobs, of which 116 are in Japan and 29 at REI headquarters in Kent. Among the laid off were two top managers in the merchandising division.
REI, which operates as a cooperative, posted an $11.4 million loss last year. It was the first since the outdoor retailer opened its doors in 1938, and company executives attributed the loss, in part, to sagging sales at the Tokyo store.
REI executives could not be reached for comment as of deadline today, but in a statement released by the company, Dennis Madsen, REI's chief executive officers, said eliminating losses in Japan would allow the company to redirect its resources toward expanding stores and its Web site in the United States.
"REI Japan succeeded in all ways except financial performance," Madsen said. "The shopping experience was exceptional and true to REI, the staff was fantastic, and we created a new style of retailing in Japan."
REI opened its Japanese store in April 2000 as the anchor tenant in the Grandberry Mall, a new shopping center located in the suburb of Minami Machida.
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