Shock and sorrow as Canada’s biggest co-op sold to US private equity firm
Sale of Mountain Equipment Co-op, outdoor retailer with over 5m members, comes as bitter blow but follows dip in performance
Canada’s best-known outdoor supplies retailer has been sold to a US private equity firm, in a move which has shocked members and former staff of the country’s largest cooperative.
Mountain Equipment Co-op, with more than 5 million members, announced late on Monday that it will be acquired by the Los Angeles-based private investment firm Kingswood Capital Management. The sale follows years of increasingly poor performance for the chain of stores, known for their extensive selection of camping, hiking and climbing gear.
News of the sale came as a blow to members and former staff.
“It’s disappointing. When you work with MEC, you see the community they’ve created. To lose that sense of cooperation when it comes to loving the outdoors and protecting our wild spaces, it’s a blow,” said a former employee.
“Sad. Lost their co-op roots somewhere along the way. Became a corporate run big box that chased something else,” tweeted Toronto writer Shawn Micallef, following news of the sale.
The co-op was established in Vancouver in 1971. To shop at the store, customers needed to buy a share in the co-op, priced at C$5 – a figure that remained unchanged for 49 years.
MEC soon gained a loyal following for its “rock-solid guarantee”, which allowed members to return gear that had broken or worn down – often years after first purchasing it.
It eventually opened in 22 locations across the country, but in recent years has come under pressure from large competitors such as Amazon and Walmart.
Last year, the embattled retailer lost C$11.487m on sales of C$462m. The effects of the pandemic only magnified the crisis within the company.
A lagging supply chain also left the company unable to respond to a surge in sales over the summer as Canadians sought socially distanced activities during the pandemic.
While the new owners plan to keep at least 17 of the stores operating, layoffs of staff are inevitable.
As news of the sale spread, co-op members began to wonder why they were not consulted on the decision – and what might happen to their shares.
“Were any of the 5 million Co-op owners (no air quotes – we own the thing) asked about selling off the MEC to an American investment company?” tweeted former parliamentarian Nathan Cullen. “Asking for 5 million friends.”
Co-op members, however, are unlikely to get any benefit from the sale.
“Like in any business, if it’s a co-operative or another, equity ranks at the bottom of the list,” the incoming chief executive, Eric Claus, told CBC News. ”I’m sure there’ll be some people that won’t be happy they lost their $5, but I think the co-op’s given them over the years a lot more value than $5.”