MEC founding member says she feels 'grief and betrayal' over sale of co-op to U.S. firm
The Canadian co-op's board says it could not withstand the financial hardships of the COVID-19 pandemic
A founding member of Mountain Equipment Co-op, a company that always prided itself on being owned by its members, says she's disappointed with its recent sale to a private U.S. investment fund.
MEC's board of directors announced on Tuesday that it has unanimously approved a deal for Los Angeles-based Kingswood Capital Management to acquire the co-op, its assets and the majority of its stores.
The board said financial hardships and the COVID-19 pandemic left them with little choice but to turn to a firm that can help the company restructure.
Sara Golling and her university friends founded the outdoor gear co-operative almost five decades ago in Vancouver. They offered $5 memberships, operated out of a van and sold affordable mountain climbing gear.
MEC has since grown into one of Canada's top outdoor gear companies, selling everything from canoes to yoga mats and travel luggage. There are five million card-carrying members, making it Canada's largest consumer co-operative.
Golling says that as a co-op, the board could have turned to its members before selling MEC. Here is part of her conversation with As It Happens host Carol Off.
What are you feeling ... as you learn the details that this co-op you helped start will soon be owned by a private U.S. investment firm?
I'm feeling grief and betrayal.
MEC was a co-op, and one of the co-operative principles is democratic member control. The members were never consulted about this. We were never warned just how bad conditions were for MEC. We knew it was bad but we had rather hoped [the co-op] could survive this rough patch. We weren't given any voice at all in what happened. We were totally ignored by the board when perhaps we could have helped.
There's a $5 membership that you can buy to be part of this co-op. Full disclosure, I am one of those members. But there are millions of people, five million members now. How can they be consulted if MEC needs to make a change and survive? Is this really a co-op in any traditional way where you can consult your members?
I think they could have done it, given the wonders of modern communications. All members could be communicated with by email. Members could vote by email. We used to vote online when we had a vote. We could have been consulted. We could have been asked if we were willing to pony up an extra $5, $10, $50, whatever it might have taken to recapture our co-op.
Of course, it may still not have succeeded in surviving if it didn't have a dramatic change of leadership and management. But I think it could have done something.
You're not just any other member, like me. You helped launch MEC in 1971. You're an original member, way back when it was, say, not supposed to be a profit-driven retail store. What was the ethos? What was the culture you were trying to create?
Well, a co-operative culture, I guess, from a member's point of view, a buyer's point of view. A member-owned retail co-op is better than the profit-driven model because we can buy better things at a better price. If we paid full price, we could be reimbursed for the overcharge by means of patronage returns.
[As a co-operative], there's this sort of seamless identity between the ownership and the users of the services. Because the customer is also an owner, we didn't have to line the pockets of shareholders who wouldn't, you know, demand the fat return on their investment. The return on investment that a member gets is good value for money spent.
If the co-op is operated as a co-op should be operated, [the member is] also a voice in directing the organization. One vote for a member, not a vote per share or block of shares.
I think one of the errors that MEC made was going for excessive growth.- Sara Golling, founding MEC member
At that time, the merchandise was stored in a van. You were all pitching in to make this co-op work and get people access to a better price of gear, better gear. Perhaps it's a victim of its own success. Can you really maintain an enterprise of the size that MEC is now on that original culture?
I think one of the errors that MEC made was going for excessive growth. I agree that the size of co-op was perhaps a mistake. It might have been better had MEC helped other co-ops get started, formed a group of sister co-ops instead of trying to be one mega co-op.
They tried to focus too much on growth [and] they [did] that by restricting board membership to people with masters of business administration, people who had experience managing huge, complex retail operations which, of course, are mostly not co-ops. So they were importing almost an anti co-operative mindset at the top. I think that was a huge mistake.
[It was] not just a change in ethos, but also a change in merchandise, right? What strikes you as you go through a MEC today?
Too much. Too much stuff. Being less careful about quality. Having too much stuff on clearance.
I think we strayed in some product areas that were just wrong for MEC's values. Travel offerings for air travel, rolling suitcases — bah!
Could you have imagined back in 1971, when you were conceiving of the idea of the store, that one day it would be someplace where there were $200 stainless barbecues, $500 coolers and rolling suitcases? Could you have imagined that that was where this was heading?
I would have been a little ticked off. I'm not a fan of car camping and I don't really think it's a way to get people into the outdoors. I think it's a way to keep people in their cars. I don't think it's a way to introduce people to hiking at all or mountaineering or outdoor living. I think that MEC should have kept itself with self-propelled recreation.
Would you shop at MEC again?
At this point, I kind of doubt it. Why would I? I feel so disappointed. So betrayed.
Written by Mehek Mazhar. Interview produced by Jeanne Armstrong. Q&A has been edited for length and clarity.