View topic - MEC is sold to private equity. Cooperative no more.

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PostPosted: September 20th, 2020, 10:43 pm 
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I've been there twice since the sale was announced, and I've chatted with a couple of employees each time I was there... all of them are honestly just glad to keep their jobs. Considering the current economic situation, and the very stark choice between sale vs. closure, I personally think the board made the right call.


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PostPosted: September 21st, 2020, 7:31 am 
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I say cut them some slack.

We know they have been struggling for a few years as the retail scene has dramatically changed. It is not as if they went out of their way to take the worst deal possible. Waving a Canadian flag around does not prove the rightness of your point of view.

MEC has been my favourite store here in Toronto since they opened on Front Street in the mid-1970’s. A year or two later Trailhead opened up a few doors down. They were both welcome additions to an outdoor gear scene made up of little but ABC Sports and Hercules on Yonge Street near Wellesley.

Over the years I have decreased my visits to once or twice a year. There are so many more options available now - including online sources - and if price is the main factor MEC sometimes does not come out on top.

Two nights ago I make an online purchase at the MEC site; this morning I received an email to the effect that the items are on their way.

I will continue to shop MEC as it tries to figure out its way to profitability.

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PostPosted: September 21st, 2020, 10:15 am 
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true_north wrote:
I say cut them some slack.

We know they have been struggling for a few years as the retail scene has dramatically changed. It is not as if they went out of their way to take the worst deal possible. Waving a Canadian flag around does not prove the rightness of your point of view.

MEC has been my favourite store here in Toronto since they opened on Front Street in the mid-1970’s. A year or two later Trailhead opened up a few doors down. They were both welcome additions to an outdoor gear scene made up of little but ABC Sports and Hercules on Yonge Street near Wellesley.

Over the years I have decreased my visits to once or twice a year. There are so many more options available now - including online sources - and if price is the main factor MEC sometimes does not come out on top.

Two nights ago I make an online purchase at the MEC site; this morning I received an email to the effect that the items are on their way.

I will continue to shop MEC as it tries to figure out its way to profitability.


Agree with True North on this - I have moved a lot of my gear buying away from MEC and physical retailers in general recently but mostly because I have been buying from smaller cottage manufacturers like Zpacks who's products aren't available in stores.

Still an annual pilgrimage to MEC pre-trip is something of a ritual for me even if all I pick up are some energy gels...

However, it is obvious that the chain had begun to "drift" somewhat in the past 10 years. They obviously made some crucial mistakes. But I blame myself for not being active in treating them like a co-op where I was a member with a voice. I feel that too often retailers listen to the blandishments of over-priced retail "consultants" and not enough to their true customers. But that's on us if we don't speak up.

I too remember fondly that front street store.... I've been a member since 1988... but I think there is an opportunity here for like minded trippers and wilderness enthusiasts to start re-thinking how we procure gear. The original co-op idea (if I recall correctly) was hatched by dirt-bag climbers looking to pool their resources to get better gear that was generally unavailable in that retail market.

Perhaps the new co-op is an internet based buying group? A good example of this in massdrop (or drop as they are now known). I've scored some great deals there (including a super light inflatable pillow) but as they are american based the prices can hit hard with currency conversion and custom duties.

There are a lot of people that frequent this board - I think that collectively we have some buying muscle. Something to think about....


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PostPosted: September 21st, 2020, 1:29 pm 
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I pretty well gave up the last time that I went in to the store looking for some good outdoor clothing. The part of the clothing section that I usually browsed was full of "don't I look cool at the bus stop and Starbucks" stuff as well as yoga pants, tops and mats. Just like the other 20 or so stores in Ottawa selling yoga gear and apres ski jackets.

Not trying to sounds snarky, but I've been cutting them some slack for the last 6 or 7 years before I gave up.

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PostPosted: September 21st, 2020, 2:18 pm 
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Ted wrote:
I pretty well gave up the last time that I went in to the store looking for some good outdoor clothing. The part of the clothing section that I usually browsed was full of "don't I look cool at the bus stop and Starbucks" stuff as well as yoga pants, tops and mats. Just like the other 20 or so stores in Ottawa selling yoga gear and apres ski jackets.

Not trying to sounds snarky, but I've been cutting them some slack for the last 6 or 7 years before I gave up.


Indeed!. Search their site for "yoga". 30 hits for clothing. Search for "canoeing". 21 hits, none of which point to clothing. From what I was told by a store member awhile ago, it's that they were trying to compete with the Lululemon store down the street (Ottawa).


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PostPosted: September 21st, 2020, 2:38 pm 
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The transition from a focus on things like RAD pants to things like collapsible titanium chopsticks and Yoga gear wasn't popular with me nor would I suspect it was popular with many on this forum. As a wise man once said, sometimes she goes, sometimes she doesn't go, that's the way she goes.


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PostPosted: September 21st, 2020, 5:48 pm 
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DougB wrote:
The transition from a focus on things like RAD pants to things like collapsible titanium chopsticks and Yoga gear wasn't popular with me nor would I suspect it was popular with many on this forum. As a wise man once said, sometimes she goes, sometimes she doesn't go, that's the way she goes.


I still have a pair of rad pants with the elastic cuffs. I only ever wear them when tripping. They are my absolute favorite. The new version they brought in were a poor replacement and an indication of how far they were divorced from practical outdoor gear.... imho...


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PostPosted: September 21st, 2020, 6:46 pm 
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I had the Rad pants with the elastic cuff. Cut the elastics off and shortened them a bit. Can't stand elastic cuffs.


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PostPosted: September 21st, 2020, 6:49 pm 
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Wabakimi Guy wrote:
I had the Rad pants with the elastic cuff. Cut the elastics off and shortened them a bit. Can't stand elastic cuffs.


I love the elastic cuffs because I'm not the tallest guy in the world and with the cuffs my pants legs aren't dragging through the mud, plus they are great for pulling up when wading.


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PostPosted: September 21st, 2020, 8:05 pm 
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Same in this house hold. Loved the cuffs, no bugs could get up your legs, and they did not have to be shortedned. Too a while to dry though. Miss the double bum with the pockets. Still have 4 pairs that have all seen hard use. Only one (the purple ones) have had to have the elastic replaced. The kids versions are still going stong has hand me downs. All fo them have tto be 24 years old!

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PostPosted: September 22nd, 2020, 8:30 am 
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The petition...

https://www.change.org/p/mountain-equip ... ment-co-op

I really don't know how much this can change things, since before the pandemic mess there were many Canadian retailers closing or going bankrupt because the bigger-picture shift to online shopping made physical bricks-and-mortar stores money losers too expensive to operate. Post-pandemic, there are forecasts being made that 100,000 small businesses will close or go bankrupt next year... those are American numbers.

Hopefully there will still be something left of MEC for outdoor gear whatever the form. I started in the very basic late seventies Vancouver and Toronto (Front Street) stores and would have been happy if they simply stayed that way and didn't go upscale.

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PostPosted: September 22nd, 2020, 1:20 pm 
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Here is another petition specifically working within the MEC bylaws to call an Special General Meeting:

https://savemec.ca/?fbclid=IwAR24bIl00N ... L04YCDuZ5g

And a Facebook group: https://www.facebook.com/groups/saveMEC ... 1372428192

Including this response to the current (although that is in doubt as the board election results for this year have not been released) board: https://www.facebook.com/groups/saveMEC ... 1372428192

Quote:
Hi everyone -
Voir plus bas pour la version française
The Chair of the MEC board of directors sent an e-mail to members about the sale of the co-op.
In the opinion of SaveMEC organizers, the message does not acknowledge that the Board had a responsibility first and foremost to co-op members as owners, and that the power of a co-op rests with its members and their ability to contribute to its success. The MEC Board of Directors could have reached out to members for support - and they didn’t. Instead, the Board decided early on to explore the sale of the co-op’s assets and to avoid consulting the members.
The Board chair writes that the co-op knows the importance of transparency, preserving jobs, and saving MEC from bankruptcy or liquidation. She writes that the board prioritized MEC’s survival.
SaveMEC response: We don’t believe that selling MEC to an investment company will save jobs in the long-term or help MEC survive. We’ve all seen too often what happens: an organization is sold to an investment firm, and its assets are slowly sold off and it disappears. That’s not survival.
Further, the second principle in the international Statement on the Co-operative identity is “democratic member control,” and as such it was the Board’s co-operative duty to ensure members had an opportunity to be involved in the decision-making. Member participation is essential for transparency, and does not prevent job preservation or financial viability. By selling MEC’s assets to an investment company, MEC as it is - a democratic, member-owned co-op - is not surviving in any real sense.
The Board chair says MEC has had performance issues since 2016, and despite efforts to turn things around starting in July 2019, the pandemic prevented a recovery. Ultimately, a sale was the only option the board considered viable after seeking support from more than 65 potential lenders and seeking other sources of funding (e.g. government support, voluntary member assessments).
SaveMEC response: There were many opportunities to provide MEC members with an update on the co-op’s financial situation and options being considered to address the insolvency and debt, namely by releasing the 2019-2020 financial statements at the annual general meeting, which the Board choose to postpone while they were seeking options for the sale.. MEC members were also not surveyed or engaged on the assessment of the options, which could have helped determine what values of MEC, including its status as a co-op, were most important to retain, according to its owners. At the very least, MEC members, as owners of the co-op, should have been informed of the Board’s decision prior to filing for creditor protection. Instead, we were “informed” through media coverage, with little time to organize an alternative solution.
The Board chair writes that MEC’s insolvency (they ran out of cash) necessitates a filing under Canada’s corporate restructuring process (the CCAA). A member vote is “not required” for the filing.
SaveMEC response: The third principle of a Co-op is “member economic participation” - and members ought to have been asked to contribute to saving the co-op before a sale was considered, and well before CCAA proceedings were necessary. Furthermore, MEC’s Rules of Cooperation (its bylaws) and the Cooperative Association Act of British Columbia require a member vote - of which 75% of voters must approve - before selling off a co-op’s business. A second vote must occur to wind it down and dissolve it. Neither of these occurred.
Other co-ops have successfully leveraged members’ support to survive financial downturns. MEC could have, should have, and still can. We’re seeking support for legal fees - and we’ve raised $25,000+ of donations in less than 24 hours. Imagine if MEC’s board had asked members to invest in their co-operative.
The message from MEC’s board of directors doesn’t address the fact that they began looking into options such as selling the co-op in February of 2020, and it doesn’t address the fact that they appear to have chosen not to seek members’ support.
As MEC’s members, we do not agree with the board’s decision to seek the sale of the co-op without member approval. We reject the suggestion that members could not have been involved. Since Monday, nearly 100,000 people who care have spoken up. We do not believe that the decision to sell MEC had to happen so quickly that members could not be involved.
We’re standing up for co-operation and our co-op.
Right now, we are working with legal counsel to:
Represent the interests of co-op members at the CCAA hearing
Pause the proposed sale of MEC to the American investment company
Ensure our democratic rights to a special general meeting of the co-op, including elections for a new board
Support legal options for members to bring MEC back to life, for example through refinancing and issuing investment shares.
We need your help to raise funds for this legal challenge - please share our fundraising campaign and contribute if you are able.
VERSION FRANÇAISE:
Bonjour à tous -
Le conseil d'administration de MEC a transmis un courriel aux membres concernant la vente de la coopérative.
Les organisateurs de la campagne SauvonsMEC considèrent que, dans son message, le conseil d'administration ne reconnaît pas sa responsabilité, avant tout, envers les membres, lesquels étant les réels propriétaires de la coopérative, et encore moins que la force d'une coopérative réside en ses membres et en leur capacité à contribuer à son succès.
Le conseil d'administration aurait pu rejoindre les membres pour obtenir leur soutien - mais il ne l'a pas fait. Au contraire, le conseil d'administration a décidé plutôt de considérer la vente des actifs de la coopérative et d'éviter de consulter les membres.
La présidente du conseil d'administration écrit que la coopérative est au fait de l'importance de la transparence, de la protection des emplois, et du devoir de sauver MEC de la faillite ou d'une dissolution. Elle écrit que le conseil d'administration priorise la survie de MEC.
Voici la réponse de SauvonsMEC : Nous ne croyons pas que vendre MEC à une société d'investissement privée va nécessairement protéger les emplois à long terme, ni aider MEC à survivre. Nous avons vu trop souvent déjà ce qui arrive : une organisation est vendue à une société d'investissement privée, et ses actifs sont lentement liquidés jusqu'à disparaître. Ce n'est aucunement de la survie.
En outre, le deuxième principe coopératif international demeure « le contrôle démocratique des membres », le devoir revenait ainsi au conseil d'administration d'assurer aux membres l'occasion d'être impliqués dans la prise de décision. La participation des membres est essentielle pour la transparence, et n'empêche pas pour autant la protection des emplois ni la viabilité financière. En vendant ses actifs à une société d'investissement privée, MEC, une coopérative démocratique appartenant à ses membres, ne survivrait pas.
La présidente du conseil d'administration affirme que MEC a eu des problèmes de rentabilité depuis 2016 et, en dépit des efforts pour renverser la situation depuis juillet 2019, la pandémie mondiale a empêché le redressement. Ultimement, la seule option viable envisagée par le conseil d'administration a été la vente, après avoir cherché du soutien auprès de plus de 65 prêteurs potentiels et auprès d'autres sources de financement (p. ex. programmes d'aide gouvernementale, possibilités de financement volontaire par les membres).
Voici la réponse de SauvonsMEC : Il y a eu plusieurs occasions de fournir aux membres de MEC une mise à jour sur la situation financière de la coopérative et les options considérées pour réagir à la situation d’insolvabilité et d’endettement, notamment par la publication du rapport financier 2019-2020 lors de l’assemblée générale annuelle, laquelle a été reportée par le conseil d’administration au moment même où celui-ci considérait différentes options de vente. Les membres de MEC n’ont pas été sondés ni impliqués dans l’évaluation des options, alors qu’ils auraient pu déterminer quelles valeurs de MEC, incluant son statut de coopérative, sont les plus importantes selon ses propriétaires. Le strict minimum aurait été que les membres de MEC, en tant que propriétaires de la coopérative, soient informés de la décision du conseil avant de recourir à la protection des créanciers. À l’inverse, nous avons été «informés» par la couverture médiatique, avec une très faible marge de manoeuvre en termes de temps pour mettre en place une solution alternative.
La présidente du conseil d'administration indique que l’insolvabilité de MEC (le manque de fonds) nécessite de passer par le processus canadien de restructuration en cas d'insolvabilité (LACC). Et qu'un vote des membres n’est «pas nécessaire» pour son application.
Voici la réponse de SauvonsMEC : Le troisième principe d’une coopérative est la « participation économique des membres », et les membres devraient se voir demander de contribuer à la sauvegarde de la coopérative avant qu’une vente ne soit considérée, et bien avant qu’une procédure au sens de la LACC ne soit nécessaire. De plus, les règlements de MEC, ainsi que la Cooperative Association Act [Loi sur les associations coopératives] de la Colombie-Britannique, requièrent un vote de 75 % des membres avant la vente d’une coopérative. Un second vote doit avoir lieu pour la dissoudre. Aucun de ces votes n’a eu lieu.
D’autres coopératives ont réussi à faire appel au soutien des membres pour survivre à des situations financières difficiles. MEC aurait pu le faire, aurait dû le faire, et le peut toujours. Nous cherchons du soutien financier pour des frais juridiques, et nous avons récolté plus de 25 000 $ en moins de 24 heures. Imaginez si le conseil d’administration de MEC avait simplement demandé à ses membres.
Le message du conseil d’administration de MEC ne mentionne pas le fait qu’ils ont commencé à explorer des options telles que la vente de la coopérative en février 2020, ni qu’ils ont choisi de ne pas rechercher le soutien des membres.
En tant que membres de MEC, nous sommes en désaccord avec la décision du conseil d’administration de tenter de vendre la coopérative sans l’approbation des membres. Nous refusons l’affirmation que les membres n’auraient pas pu être impliqués. Nous ne croyons pas que cette décision ait dû être prise si rapidement, au point de ne pas pouvoir consulter les membres.
Nous défendons les principes coopératifs et notre coopérative.
Présentement, nous travaillons avec des conseillers juridiques pour:
Représenter les intérêts des membres de la coopérative à l'audience prévue selon la LACC
Suspendre la vente annoncée de MEC à une société d'investissement privée américaine
Assurer l'exercice des droits démocratiques lors d'une assemblée générale extraordinaire des membres de la coopérative, incluant l'élection d'un nouveau conseil d'administration
Appuyer les options légales des membres dans le but de redonner vie à MEC, telles que le refinancement et l'émission de parts de placement
Nous avons besoin de votre aide pour obtenir les fonds pour cette contestation judiciaire -. S’il vous plaît, partagez notre campagne de financement et contribuez si vous en êtes capable.
Nous travaillons également à obliger le conseil d’administration de MEC à convoquer une assemblée d’urgence, de sorte que l’on puisse reprendre le contrôle de la coopérative. En tant que membre de MEC, vous avez le droit de demander cette assemblée, et pouvez signer la pétition pour une assemblée ici: https://www.ourmec.ca/

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PostPosted: September 22nd, 2020, 3:24 pm 
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Splake wrote:
Here is another petition specifically working within the MEC bylaws to call an Special General Meeting:

https://savemec.ca/?fbclid=IwAR24bIl00N ... L04YCDuZ5g

And a Facebook group: https://www.facebook.com/groups/saveMEC ... 1372428192

Including this response to the current (although that is in doubt as the board election results for this year have not been released) board: https://www.facebook.com/groups/saveMEC ... 1372428192




I am happy to sign petitions but what is the end game? Is it merely to block the sale? If so what's the strategy going forward? Is there a viable alternative? Short of doing what the PE company will do? Namely retrench close stores cut costs refocus?


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PostPosted: September 22nd, 2020, 5:04 pm 
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MEC lost me when their quality dropped and the house brand started importing and re-labelling. The MEC Tarn-3/4 tents are Eurekas, they just rebranded them. Their cycling pants are "Fait au Chine." I can't buy decent paddles or portage sacks there. And if you think that offshore-ing hurt their business, I wonder what it did to other domestic manufacturers. Ostrom anyone - what if they had adopted Ted's shop when he was ready to retire, and held to their core principles of high quality, domestically produced, tough gear.

They had so much potential to be so much, but sadly (and as others have pointed out...) became little more than a yoga shop. Sad thing is, Sail is heading down the same road with 75% of their store being either clothes or guns and no support gear in between.

I miss the old days of wandering through "real" gear shops and checking out good product.


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PostPosted: September 23rd, 2020, 9:32 am 
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ameaney wrote:
I am happy to sign petitions but what is the end game? Is it merely to block the sale? If so what's the strategy going forward? Is there a viable alternative? Short of doing what the PE company will do? Namely retrench close stores cut costs refocus?


I think step 1 is transparency - heck even translucency would be a step forward. Based on the balance sheet as of the 2018-2019 financial report net assets after all liabilities and debt was $188 million. While they most likely burned through case in 2019-2020, the information available suggests there should be a healthy position to work from.

Until there is visibility and acceptance of member participation then I don't think anyone can give a concrete answer on what the end result will be. As a complete guess, I would expect sale of $10's of millions of real estate to eliminate debt, a significant reduction in unnecessary stores, and a refocusing on the co-op purpose as opposed to for profit mass market retail.

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