The board of administrators for Mountain Tools Co-op, Canada’s largest shopper co-operative, says it has unanimously accepted a deal for a non-public investor to amass MEC’s property, together with the vast majority of its retail shops.
The Los Angeles-based Kingswood Capital Administration is shopping for the out of doors items retailer by way of the Firms’ Collectors Association Act (CCAA) — laws that enables financially troubled corporations to restructure. Financials particulars of the transaction weren’t disclosed.
Final 12 months, the retailer detailed monetary issues attributable to sluggish gross sales, stock backups, provide chain issues and ever-increasing on-line competitors. The retailer misplaced $11.487 million in 2019 on gross sales of $462 million, based on monetary statements audited by KPMG and posted on MEC’s web site.
MEC mentioned the acquisition is important to make sure a future for the retailer and that its monetary struggles had been exacerbated by the disruption of the COVID-19 pandemic.
MEC’s board chair Judi Richardson referred to as it a “troublesome choice” in a launch.
“Regardless of important progress on a considerate turnaround technique undertaken by new management, no technique may have anticipated or overcome the influence of the worldwide pandemic on our enterprise,” Richardson mentioned.
“Right now’s announcement, together with the transition from a co-operative construction, is making a constructive path ahead for MEC.”
5 million members
The Vancouver-based out of doors gear and clothes retailer was shaped in 1971. It’s Canada’s largest shopper co-operative with over 5 million members.
MEC has efficiently obtained courtroom safety below the CCAA proceedings. This can enable MEC to proceed working its retail enterprise whereas the acquisition is accomplished.
The sale continues to be topic to courtroom and regulatory approvals however is predicted to shut by the tip of the 12 months.
On the finish of the transaction, MEC will likely be a privately-owned firm.