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RichardKorry

MEC declares bankrupcy and sells itself to a private equity firm

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Dear valued member,

We recognize this has been an unsettling week for members. The sale of MEC’s business, and the decision to move the business away from the co-operative model was, after all, a very difficult decision – but it was the right one. Facing a stark choice, we chose to preserve employment opportunities, a larger store presence, and a commitment to MEC’s ethos rather than fold up the MEC tent for good.

As you may know, this week, MEC filed for protection under the Companies' Creditors Arrangement Act ("CCAA"). Effectively, this was a recognition that MEC was financially insolvent, and in dire need of support to continue moving forward. Fortunately, at the same time, our Board of Directors announced unanimous support for an agreement with Kingswood Capital Management, LP. The agreement with Kingswood will ensure that MEC has a brighter future.

We’ve heard your questions, let us attempt to answer them:
 

First, you’re probably wondering, “what happened?”
MEC has experienced increasing performance issues since 2016. In July 2019, new leadership was brought in to develop a plan to turn MEC around. We were making significant progress but then the global pandemic hit and exacerbated MEC’s financial challenges.
A Special Committee of the Board engaged in an extensive examination of options to address the persistent financial issues. As part of the review, the Special Committee, in concert with expert advisors, sought refinancing from over 65 potential lenders, proactively explored and leveraged applicable government support programs, and examined funding MEC through voluntary member assessments.
Ultimately, a sale was the only option that would save MEC from bankruptcy or liquidation.

We’ve been asked, “what is CCAA?” and “why don’t members vote on this decision?”
Our persistent financial challenges combined with the pandemic created a situation in which MEC became insolvent, and this necessitated a filing under CCAA. In CCAA, the court oversees the restructuring process to ensure fairness. A member vote (or in the case of corporations, a shareholder vote) is not required.
CCAA allows an organization to maintain its business ‘in the ordinary course’ while giving it the breathing room necessary to restructure its affairs. This is done to preserve as much of its business as possible for the benefit of employees, members/customers, suppliers and other stakeholders in the communities in which it operates.

Many are wondering “why wasn’t the board more forthcoming or transparent?”
First of all, we understand that many are upset and apologize for not communicating more or sooner. As a member-based co-op, we know the importance of transparency, and value co-operative principles. But in exercising our fiduciary duty, the board’s top priority was preserving jobs and saving MEC from bankruptcy or liquidation. In short, we prioritized MEC’s survival.
 

Since our founding in 1971, MEC’s deeply loyal members have been synonymous with who we are and what we do. That will not change. MEC will continue, and our values will be maintained, though it may look a little different.

Kingswood's commitment to honouring the MEC ethos through their Canadian affiliate and the solid financial footing from this transaction gives us tremendous confidence in the future. The Kingswood team, and the incoming CEO, Canadian and longtime MEC member Eric Claus, are very optimistic about MEC’s future. That optimism was at the heart of the board’s decision to enter into this agreement. For more information see: www.alvarezandmarsal.com/MEC.

Guided by the last 50 years, we look forward to MEC’s continued service to communities across Canada enabling everyone to lead an active outdoor lifestyle.

Thank you for your commitment to MEC,

Judi Richardson
Chair of the Board of Directors

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this blows ... I recognize it's been a challenging business environment made even more so now with e-commerce .. I'm glad to see you will be able to keep it going I thank all the MEC employees, past and present. Best Wishes to all

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Mec has been all downhill since they got rid of the serratus line of packs..  I love my genie pack which they no longer make.  

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I liked a lot of things about the organization and supported them through purchases when I could. Hedge funds just want to strip costs, temporarily drive up value, and flip the asset for a profit, so hopefully the company will come out the other side and be re-born.

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MEC used to be somewhat easy to get to when driving from Seattle to Squish.  They also seemed to carry descent outdoor oriented products.

Now they are a standard brick and mortar gear store.  Maybe they have good stuff, but there are plenty of descent web based stores. 

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They have been my source for "hardman" pads for a long time.   It is an integral part of my kit, not because I'm hard, but because they really work to give you comfort around camp without danger of deflating anything.  And they're a great backup pad and hardly weigh anything.

But, it doesn't look like they carry them anymore anyways?

Perhaps this is similar enough?  https://foammart.com/product/l200-14-colors/

 

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22 hours ago, JasonG said:

They have been my source for "hardman" pads for a long time.   It is an integral part of my kit, not because I'm hard, but because they really work to give you comfort around camp without danger of deflating anything.  And they're a great backup pad and hardly weigh anything.

MEC was my source for yellow hardman (Evazootte) pads too. I purchased my current Evazotte pad from Pro Mountain Sports, although it is grey. The manufacturer has a website: https://www.zotefoams.com/product/azote/evazote/

Edited by DPS

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On 9/21/2020 at 2:24 PM, JasonG said:

I saw that @DPS, no couldn't find an Evazote dealer online?

I found some lightweight hiking/backpacking stores on line that sell the grey Evazote pads. Gossamer Gear sells one that is similar to what I use. I've not run across the iconic yellow one, only grey ones. 

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Posted (edited)

You can get a 70”x20” pad like that from Sierra Trading Post with free shipping to their store for $7/ea and they weigh 234g.

https://www.sierra.com/trespass-radix-sleeping-pad-70x20-rectangular~p~443fm/

The gossamer gear ones cost $32 PLUS $20 just for shipping alone for a single pad, and it’s 1” narrower and 11” shorter. F that.

Edited by bargainhunter

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Evazote pads are cross linked polyethylene, the STP pad is polyolefin (the stuff Primaloft is made from), so not exactly the same, but nice find.  

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