Well, it’s all over but the shouting. And the final signatures and handshakes, etc. Canada’s Mountain Equipment Co-op, founded in 1971, shares sold to members for a measly $5, a beloved outdoor institution, though, as many commenters have pointed out, one that was already unrecognizable compared with its rootsy past, will officially be sold to American private equity firm, Kingswood.
There was a brief moment of collective breath holding, not only by MEC members loyal to the original founding principles of the co-op, but to outdoor lovers sad to see a private equity firm eat up more of our culture, when a SAVE MEC grassroots campaign collected thousands of signatures and raked in more than $100,000 to cover legal fees incurred while trying to block the sale in order to restructure the co-op’s board, or, at the very least, to give members, which were shareholders after all, a say in the sale of the co-op.
Members of the co-op presented a request to delay to sale to a B.C. Supreme Court judge last week. They requested time to prepare a reasonable counteroffer to the existing MEC board, who were preparing to sell the co-op because of declining revenue.
Justice Shelley Fitzpatrick dismissed the request. MEC’s board successfully argued that the grassroots efforts, though noble, couldn’t meaningfully address the financial problems running through the co-op.
Organizations that represent co-op interests across Canada stepped in to advise SAVE MEC and participated in the campaign, and, in the wake of the ruling, expressed concern for other, smaller co-ops.
“For 49 years MEC was a co-operative. In the B.C. Co-op Association’s legislation … and in MEC’s own bylaws it was very clear that members needed to be consulted before a partial or total sale of assets,” said André Beaudry, Director General of Co-operatives and Mutuals Canada.
“Can a process like this now move forward in other co-operatives in Canada where the members aren’t consulted?”
That’s a concern for the future. For now, MEC’s sale will proceed as planned, co-op members will not receive buybacks of their shares, and a once proud and proudly independent outdoor retailer bends its knee to private equity. Quite a ride for a company that started 50 years ago with $65 and five members and ends with 5.8 million.