British Columbia

MEC members say they feel betrayed, disappointed by U.S. acquisition

Members of Mountain Equipment Co-op, Canada's largest consumer co-operative, are mobilizing in reaction to news that the iconic outdoor brand is on the cusp of being acquired by a U.S. investment firm. 

Petition to stop the sale garnered more than 10,000 signatures in the past 24 hours

A Mountain Equipment Co-op store, one of 22 across the country, in Toronto, Ont. (Don Pittis/CBC)

Citing disappointment and betrayal, members of Mountain Equipment Co-op, Canada's largest consumer co-operative, are mobilizing in reaction to news that the iconic outdoor brand is on the cusp of being acquired by a U.S. investment firm. 

On Monday, the board of directors announced it had unanimously approved a deal for Kingswood Capital Management, an Los Angeles-based private investor to acquire MEC's assets, including the majority of its retail stores. At the end of the deal, MEC will be a privately owned company. 

The deal, which is proceeding under the Companies' Creditors Arrangement Act, comes after years of financial struggle for the retailer.

But some of the co-op's members, who total over five million across Canada, are not pleased with the direction of the Vancouver-based co-operative.

Sara Golling is one of the founders of Mountain Equipment Co-op. She says the organization's early co-operative values have been lost to standard retail practises. (Submitted by Sara Golling)

Michael Roy, who joined the co-op as a high school student, has started a petition which has garnered more than 10,000 signatures in the past 24 hours. 

Roy says the decision to privatize MEC will take away democratic decision-making power from its members and put its socially conscious core at risk.

That's in line with what Sara Golling, one of the founders of the co-operative, believes.

"I feel betrayed," says Golling, who was also a previous board member. 

Golling said the original values of the group who founded MEC in 1971 — struggling students who wanted good quality climbing, camping and hiking gear at reasonable prices — have largely disappeared.

"I think it got taken over, got co-opted by leadership and management who were captured by the sort of the anti-cooperative values, the standard retail practices and imperatives that I think Mountain Equipment Co-op was actually founded to provide members with an alternative to."

Michael Roy, a MEC member since high school, started an online petition that has garnered over 10,000 in the past 24 hours. (CBC)

Steven Jones, a long-time member who ran unsuccessfully for the co-op's board in the past, said he was "disappointed on many levels."

He suggested that the co-op's board should have at least reached out to the members first. 

"There are five million Canadians that are owners in this community organization and it shouldn't be possible for it to be sold off to foreign interests without our involvement," Jones said. 

For their part, MEC's board said they looked at different options for refinancing — loan, government support programs and funding through voluntary member assessments — and chose this one.

MEC's Board Chair Judi Richardson called it a "difficult decision" made after considering these options. 

And according to Max Wolinsky, a business lawyer with Murphy & Company, the CCAA process doesn't need approval by the shareholders or in this case, the membership. A petition, he says, would have no real force or standing on the process.

"I don't really see a way that the membership is going to drastically change the direction of the CCAA proceedings ... [and] I say that as an MEC member myself," Wolinsky said. 

Eric Claus, the incoming CEO if the Kingswood acquisition is approved, says he is well aware of what MEC means to its members.

"[It] doesn't mean because you're a private company that you're bad people," Claus said. "There will be, of course, upset people but I think over time that will subside."

With files from Georgie Smyth, Zahra Premji, Susana da Silva