Petition to stop privatization of Mountain Equipment Co-op nearing 75K target
Canada’s venerable outdoor recreation gear and clothing retailer Mountain Equipment Co-op is being sold to Kingswood Capital Management, LP ending the long-run of MEC, which was founded in 1971. But, there is already opposition gathering momentum just days after the announcement.
According to a press release, 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.”
"MEC is an iconic brand founded on strong values and has a loyal following," said Kingswood's Managing Partner, Alex Wolf. "We have tremendous respect for those values and the loyal membership and are honored to be partnering with Canadian operating partners who will represent us on the ground in Canada working with MEC's management team following the closing to ensure a bright future for MEC. Upon completion of this transaction, we – together – can inspire and equip Canadians in leading an active outdoor lifestyle for years to come."
Eric Claus, who is described as a longstanding MEC member and Canadian, will lead the new group as Board Chair and CEO.
As MEC was facing what is described as “persistent financial challenges,” in recent years, that were only exacerbated by the COVID-19 pandemic, a special committee was set up to look at refinancing and other options that would preserve MEC’s core values.
"After careful consideration of all viable options, the Board made this difficult decision," said MEC's Board Chair Judi Richardson. "Despite significant progress on a thoughtful turnaround strategy undertaken by new leadership, no strategy could have anticipated or overcome the impact of the global pandemic on our business. Today's announcement, including the transition from a co-operative structure, is creating a positive path forward for MEC. Kingswood's commitment to honouring the MEC ethos and the solid financial footing that this transaction will provide gives us tremendous confidence in the future. Since our founding in 1971, MEC's deeply loyal customers have been synonymous with who we are and what we do. That won't change."
Since details of the deal were announced, some have questioned how the self-described co-op could go ahead with such a major deal without a vote from the membership.
MEC has taken in more than $27 million in $5 membership payments for its shareholders. Now that they are selling to a US private equity firm, will they pay back each and every member? Here is the form to cancel your membership: https://t.co/pAodZW2ltG #MEC #MountainEquipmentCoop— James D. Schwartz (@jamesschwartz) September 15, 2020
While others have tried to rally opposition via an online petition that already has over 71,000 names.
"This decision to take one of Canada's treasured co-op businesses private was made by the board with no mandate from or consultation of the 5.4 million MEC members across Canada," the petition reads, in part.
"We call upon the MEC Board and Management team to cancel this decision to sell to a private equity firm - and engage with and consult MECs members."