A Mountain Equipment Coop, MEC, sign is seen on a store front in Montreal on Tuesday, June 18, 2019. THE CANADIAN PRESS/Paul Chiasson

A Mountain Equipment Coop, MEC, sign is seen on a store front in Montreal on Tuesday, June 18, 2019. THE CANADIAN PRESS/Paul Chiasson

Struggling outdoor equipment retailer MEC opposes efforts to pause sale to Kingswood

MEC said it’s urgent for the sale to close before the retailer sees ‘significant weekly cash flow losses’

Beleaguered outdoor recreation retailer Mountain Equipment Co-op is opposing a proposed delay of the company’s sale to a U.S. private investment firm, saying there is “significant urgency” to closing the deal.

Kevin Harding with the Save MEC campaign filed an application in a B.C. court last week to adjourn the sale to California-based Kingswood Capital Management, part of an effort to preserve the retailer’s status as a co-operative.

The group said it wants to “explore alternative options to address MEC’s liquidity issues,” including selling real estate, obtaining operating loans and bringing in a credit card rewards program.

In a response filed Monday, the company doubted the group’s ability to address MEC’s cash flow issues, noting that the proposed sources of potential funding don’t involve “concrete commitments or realistic options.”

The Vancouver-based company said given the number of factors that need to be addressed before the sale closes, including negotiations with landlords, the proposed adjournment would put the deal in jeopardy.

MEC said it’s urgent for the sale to close before the retailer experiences “significant weekly cash flow losses,” which may worsen with rising COVID-19 rates.

“The transaction has to close in a timely manner before MEC’s forecasted losses escalate and in order for the purchaser to take advantage of the upcoming holiday sales periods,” MEC said in the court filing.

The company added that MEC’s other stakeholders, including its employees, would be “unfairly prejudiced” by the proposed adjournment, as there is a “real risk” that a delay could lead to the closure of MEC’s operations.

The retailer, which specializes in outdoor equipment and clothing, has 1,143 active workers with the majority located in British Columbia, Ontario and Alberta, according to the first report of the monitor on Sept. 24.

The 49-year-old retailer traces its roots back to a group of west coast mountaineers, who came up with the idea of opening a Canadian outdoor recreation store on a climbing trip to Mount Baker, Wash.

The grassroots co-operative officially launched in 1971 with six members and about $65 of operating capital.

MEC now has roughly 5.8 million members, according to court documents. Members pay a one-time membership fee of $5, which entitles them to one share in the co-op and the right to shop at MEC.

On Sept. 14, after struggling with sluggish sales, inventory issues and increasing online competition, the company filed for creditor protection and announced its sale to a Canadian subsidiary of Los Angeles-based Kingswood.

While the move came as a surprise to members, the outdoor gear and equipment retail space has become increasingly crowded in recent years.

In June, Canadian outdoor retailer Sail Outdoors Inc. filed for bankruptcy protection in order to restructure amid the COVID-19 pandemic.

However, as a member-owned co-operative, the group Save MEC has argued the store’s sale should require their approval.

A petition against the deal had garnered 140,000 signatures by Tuesday, and the group is continuing to work on an alternative to selling the retailer.

“We’ve been in discussions with lenders and other parties, and we currently have expressions of interest surpassing $100 million in value,” Elliot Hegel, a spokesman for Save MEC, said Tuesday.

“We’re asking for a fair chance to save our co-op.”

He said the group isn’t surprised by MEC’s opposition to the request for a two-week delay to proceedings.

“Throughout this whole process we have seen that MEC and the board have been unwilling to involve the member-owners in discussions about the future of our co-op,” Hegel said. “The members were not even informed of MEC’s financial troubles, let alone the sale of the co-op’s assets to Kingswood.”

The Canadian Press

Like us on Facebook and follow us on Twitter.

Want to support local journalism? Make a donation here.

Business

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Vernon-North Okanagan RCMP was called to a report of a fight at an Okanagan Landing Halloween party Saturday, Oct. 31, but issued the homeowner a ticket  under the COVID-19 Related Measures Act for having too many people at the party. (Black Press file photo)
Police investigating after woman dragged, run over by truck in Jimsmith area

A woman sustained severe injuries after being allegedly pushed out a truck,… Continue reading

letter
LETTERS: Travel to Kimberley

A second home owner appreciates Mayor’s comments; a resident doesn’t agree

VICTORIA, CANADA - MARCH 25: BC Ambulance Services stock photography session March 25, 2013 in Victoria, British Columbia, Canada.  (Photo by Jeff Vinnick Images)
Paramedics responding to increased volume of overdose calls

Data released by BC Emergency Health Services shows a rising provincial trend of overdose responses

Recipients of last year’s Winter Games Legacy Grant funds. Bulletin file.
City of Kimberley accepting applications for Winter Games Legacy grants

Grants are available for amateur sports organizations

Maj.-Gen. Dany Fortin, vice-president of logistics and operations at the Public Health Agency of Canada, speaks at a news conference on the COVID-19 pandemic in Ottawa, on Friday, Jan. 15, 2021. THE CANADIAN PRESS/Justin Tang
B.C. records 500 new COVID-19 cases Wednesday, 14 deaths

Outbreak at Surrey Pretrial jail, two more in health care

Gov. Gen. Julie Payette takes the royal salute from the Guard of Honour as she makes her way deliver the the throne speech, Wednesday, September 23, 2020 in Ottawa. THE CANADIAN PRESS/Fred Chartrand
Gov. Gen. Julie Payette resigns after searing report into workplace culture: reports

Payette, who is the Queen’s representative in Canada, has been the governor general since 2017

Grounded WestJet Boeing 737 Max aircraft are shown at the airline’s facilities in Calgary, Alta., Tuesday, May 7, 2019. WestJet will operate the first commercial Boeing 737 Max flight in Canada today since the aircraft was grounded in 2019 following two deadly crashes. THE CANADIAN PRESS/Jeff McIntosh
Passengers unfazed as WestJet returns Boeing 737 Max to service on Vancouver flight

After a lengthy review process, Transport Canada cleared the plane to return to Canadian airspace

The top part of the fossil burrow, seen from the side, with feathery lines from the disturbance of the soil – thought to be caused by the worm pulling prey into the burrow. (Paleoenvironntal Sediment Laboratory/National Taiwan University)
PHOTOS: SFU researchers find evidence of ‘giant’ predatory worms on ocean floor

Fossils found the prove the existence of an ancient Taiwanese worm as long as two metres

RCMP officers provide policing for 63 B.C. municipalities under a provincial formula based on population. (Black Press file photo)
B.C. communities warned of upcoming RCMP unionization costs

Starting salaries for city police officers are 30% higher

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

(Pxhere)
B.C. nurse suspended after using Tensor bandage to trap long-term care patient in room

Susan Malloch voluntarily agreed to a three-day suspension of her certificate of registration

Abbotsford’s Skully White (left), who donated his kidney in December, has started a campaign to find other recipients and donors. The first candidate is retired police officer Gavin Quon. White owns and operates a hotdog stand, Lullys Food Experience, out of the Abbotsford Canadian Tire parking lot. (Facebook photo)
After donating his kidney, Abbotsford hotdog king starts donor campaign

Skully White donated his kidney to customer Tim Hiscock in December

Toronto-based director Michelle Latimer was recently scrutinized after years of claiming she was of Algonquin and Metis descent. (CANADIAN PRESS/Chris Young)
Haida activist calls for hefty fines, jail time against those who claim to be Indigenous

Filmmaker Tamara Bell proposing the Indigenous Identity Act – to dissuade ‘Indigenous identity theft’

Most Read