Conclusion
To answer the final question: Would the concept of REI fit in the Netherlands or any other European country? The answer would be “no” due to the high cost and risk in setting up a store in a different country as well as REI’s latest negative experience. REI tried to get into the Japanese market and set up a store in Japan which had to be closed down after 18 month of operations only. The company needed 30 $ million to set up the store and another 30 $ million to close the store down which will take REI around 10 years to recover from the failure.
To conclude, REI would have to set up 3 or more stores at the same time in one country to be able to be recognizable as a brand which involves high cost in finding a location and setting up a store. In addition, if the company fails and is not able to make a profit, high costs are involved in closing down the store. Furthermore, it involves high risks for REI due to the lack of knowledge about European customers as well as producing the right equipment for the special target group. For instance, REI does not cover fishing gears which would be needed to set up a store in the Netherlands.
