mec sold

MEC sold to U.S. company and members are not happy

Mountain Equipment Co-Op (MEC) has announced an impending deal that will see a Los Angeles-based private investment firm acquire "substantially all" of the company's assets, including the majority of its retail stores.

Long story short: Canada's largest consumer co-op will soon be owned by an American company.

Financial details of the transaction have yet to be disclosed, but MEC confirmed Monday that the sale is being made through the federal government's Companies' Creditors Arrangement Act (CCAA).

The CCAA protects large insolvent companies from creditors and allows them to continue operating while they restructure in an attempt to stay afloat. Thus, MEC isn't closing down, it's simply being sold (to Kingswood Capital Management, LP).

MEC's Board of Directors said in a release issued Monday that the decision was made to "ensure a thriving future" for the Canadian retailer.

"A Special Committee of the Board engaged in an extensive examination of options and alternatives to address the persistent financial challenges faced by MEC's business in recent years," reads the release.

"Exacerbated by the unprecedented disruption of the COVID-19 pandemic, these challenges impacted MEC's ability to secure a refinancing on terms that would meet MEC's future needs."

The transaction remains subject to regulatory approvals, but is expected to close sometime in late 2020.

MEC, which was established in 1971 by four University of British Columbia students, currently operates 22 retail stores across the country with a combined membership of more than five million people.

It's an iconic Canadian brand, to say the least, with an incredibly loyal following — one that its current board hopes to protect with the appointment of a designated Canadian affiliate CEO at Kingswood.

"The acquisition will strengthen MEC's balance sheet, preserve jobs and guarantee members continued access to authentic advice and high-quality products at competitive prices," notes the release.

"Upon completion, the MEC retail business will be under private ownership."

Lead photo by

Hector Vasquez

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