It's hard to find Canadians who dislike @mec, the venerable, beloved co-operative outdoor store modeled on REI. Millions of us have paid $5 to join the co-op and make it our first port of all for outdoor gear.
It's being sold to a rapacious American Private Equity fund.
1/
No. Really.
It's a sordid and disgusting tale.
About a decade ago, the board started to favour members who had operational experience over traditional board members - drawn from the co-ops rank and file.
citynews1130.com/2020/05/20/mec…
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They rammed through by-law changes in '13 that let them:
a) Disqualify potential board candidates from nomination; and
b) Recommend slates of candidates to the membership
This kicked off a spiral of ever-more-rigged elections that changed the co-op's fundamental character.
3/
Board seats started going to people whose experience was in the C-suites of major for-profit corporations; while the executive ranks were filled with merchandisers from failed electronics stores who filled the co-op stores with stupid gadgets.
4/
The co-op underwent disastrous expansion under this new regime, and began to lose money - $23.5m in losses on $462m in sales in 2018/19.
The board ignored members and founders who called on it to return to selling good outdoor gear at good prices:
vancouversun.com/news/local-new…
5/
And then, in a stroke of absolute malfeasance, they voted to sell the co-op to a US private equity firm called Kingswood Capital Management.
theguardian.com/world/2020/sep…
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As a reminder, here's the private equity playbook: buy beloved companies, load them with debt, reduce the quality of their products, liquide their pension funds, collect gigantic "management fees" and walk away, leaving behind wreckage and sorrow.
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MEC's board undertook this decision without putting it to the co-op membership - you know, the actual owners of MEC - who could have rescued the co-op with a modest $5-10 fee per member.
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It's not clear what will become of the proceeds of the sale (the co-op owns $372m in assets) - I wouldn't be surprised if the board and C-suite of the co-op found a way to take the lion's share in "consulting fees" and similar grifts.
9/
I have served as a board member on a Canadian co-op. This is absolutely illegitimate, reckless conduct and I hope the board is sued over it. I think they acted illegally.
10/
Co-op members (savemec.ca) have started a petition - which has attracted 30,000 signatures in mere days. I signed it.
change.org/p/mountain-equ…
eof/
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