Mountain Equipment Co-op (now called 1077 Holdings Co-operative) was a Canadian co-op that started the MEC outdoor gear retail brand. The MEC brand name, assets and store leases were purchased by the American private investment firm Kingswood Capital Management's subsidiary Mountain Equipment Company in October 2020. 1077 Holdings Co-operative remains active to deal with the remaining claims by creditors and will be wound up at some point in the future.
Mountain Equipment Co-op was formed as a Canadian consumers' co-operative to sell outdoor recreation gear and clothing exclusively to its members. Mountain Equipment Co-op was notable for its commitment to environmental protection and other causes. As a co-op, Mountain Equipment Co-op sold only to customers who held a lifetime membership, which was technically a share of the co-op. MEC (as a co-operative) was Canada's largest supplier of outdoor equipment. Following its founding in Vancouver, British Columbia in 1971, MEC expanded across Canada and grew to operate stores in 20 cities. Once catering to mountaineers and climbers, MEC targeted a broader, more urban clientele, having added more clothing as well as cycling and yoga supplies. At its peak MEC had over 5.4 million members in Canada and internationally.
Facing mounting financial losses in 2019 and during the COVID-19 pandemic in Canada, in September 2020, without consulting its membership, the board of directors of the co-operative entered into an agreement to sell its assets to Kingswood. Following the completion of the deal in late October, Kingswood began operating the retail assets as a for-profit business.
Organization
MEC operated twenty-two retail stores and a "Corporate & Group Sales" store for large orders. Some MEC stores incorporated eco-friendly designs. The Ottawa and Winnipeg stores were the first and second retail buildings in Canada to comply with Canada's C2000 Green Building Standard, which acknowledges buildings that achieve energy consumption 50% less than similar conventional structures.
The organization designed and produced a significant proportion of its retail products and also carried other well-known brands. A significant proportion of the company's inventory was manufactured in Asia, with names and addresses of partner-factories made publicly available on the co-op's website. MECs' stated aim is to inspire and enable people to lead active, outdoor lifestyles. They accomplish this by selling outdoor gear, clothing and services. MEC's head office and telephone service centre were located in Vancouver. Its distribution centres were located in Brampton, Ontario and Surrey, British Columbia.
Governance Chris Strashok, the author of an academic study, remarked in 2011 that "currently there are 3.3 million member owners making MEC the fourth largest democratic entity in Canada, after the governments of Canada, Ontario and Québec." Each year, every member of MEC has the opportunity to vote in the elections for its board of directors, as well as on "special resolutions", through a variety of methods. Before the election period, an information package with platforms of candidates and information on resolutions is distributed. Election results are announced at the annual general meeting.
MEC is governed by a nine-member board of directors. Each year, three directors are elected to three-year terms.
MEC holds its annual general meeting in Vancouver, BC. At this meeting, the Chief Executive Officer and Committee members deliver their annual reports, and answer questions from co-op members. "Other resolutions" may also be brought forward and voted upon. The AGM is typically webcast and members can log in and ask questions. Typically, members recite their member numbers before speaking and these numbers are recorded in the official meeting transcript.
Co-op structure Strashok remarked in 2011 that, "profits are either shared among member owners based on how much the member uses the co-operative or invested back into the co-operative to improve the services provided to the members, and to sustain the business. Because of this, MEC is financially conservative, growing slowly and taking few risks. This can be challenging when the business is moving through different stages of growth. It does, however, create space for creative solutions and capital remains local benefiting the communities in which MEC operates." While the democratic structure gave one vote to one member, the financial structure and "policies and legislation pertaining to business in Canada, such as how capital is classified, the classification of dividends versus patronage payments, and tax incentives for investing in co-operatives" were, as noted by Strashok, ill-studied by Canadian business schools. These profits were returned to members as the patronage dividend or patronage return that can be found in yearly financial statements.
For the purposes of governance and direction at the AGM the policy was one member, one vote, regardless of how much share capital had been earned by any particular member. Share redemptions were carried out, for example through gift cards, and may have required a policy affirmation. Thus MEC found a means of treating each member as equal, regardless of purchases and shares earned. In 2020 the 5.7 million members had a paid-up capital of $192 million, well above the $5 initiation fee per member. This capital was reinvested in things like stock of merchandise and expansion of the retail empire.
Purposes and objectives The purposes of the Co-op were from the outset closely intertwined with its governance model. In 2008, the commonweal of the Co-op was measured by Ponto according to Anielski's Genuine Wealth model, while in 2011 Strashok produced a case study that focused on its promotion of sustainable development. The governance model was altered significantly from 2011, to change MEC's focus to a more traditional accounting and retail-based business model.
Environmental and social initiatives MEC had undertaken initiatives in the field of social and environmental responsibility, including: MEC was the first Canadian retailer to publicly disclose its list of factories and their locations, and updates this list annually. In May 2007 MEC became a member. MEC committed to the goal of sourcing 100% Bluesign approved fabrics by 2020. In 2019, 88% of MEC apparel and sleeping bag materials were Bluesign certified. Bluesign is a third party environmental, health and safety standard for the textiles industry. MEC committed to using 100% organic cotton for all MEC-branded apparel and sets yearly targets to increase its offering of products made from recycled materials. MEC promotes a variety of outdoor education opportunities to its members by an online calendar of events. In December 2007, MEC became the first retailer in Canada to stop selling water bottles and food containers containing bisphenol A, a chemical that is used to make some plastics and has been linked in some studies to increased incidence of cancer and other diseases. In 2008, MEC eliminated all single-use shopping bags from its stores. In 2010 MEC launched a new green building initiative called MEC GBS (Green Building Systems). The aim of the initiative was to ensure MEC leaders in building and operating environmentally-friendly facilities. Its Winnipeg, Longueuil, Burlington and North Vancouver stores, as well as its Montreal office received LEED Gold ratings. Its Winnipeg, Montreal and Ottawa stores also comply with C2000 standards (Natural Resources Canada's Advanced Commercial Buildings Program). In March 2018, MEC announced that it would no longer stock products made by Vista Outdoor, in response to the 2018 NRA boycott, in the wake of the Stoneman Douglas High School shooting, because some of Vista Outdoor's profits are derived from the production of assault weapons.
Business initiatives The organization had engaged in several business initiatives: In 1997 MEC introduced a free of charge online gear swap where members can trade used outdoor gear. MEC's distribution centre in Surrey British Columbia was opened in the fall of 2007 and was the first "Green" LEED (Silver) accredited distribution centre in North America. In November 2008 MEC opened bicycle repair shops in Vancouver, Calgary, Toronto and Montreal stores. The Winnipeg and Burlington stores opened their repair shops in March 2009. , sixteen stores have bike servicing. In the summer of 2008 MEC launched a series of annual national paddling and biking expositions named "MEC Paddlefest" and "MEC Bikefest".
Leadership CEO Bill Gibson 1992–2000 Peter Robinson 2000–2007 David Labistour 2007–2019 Philippe Arrata 2019–20
Board chair Chris McNeil Anders Ourom Denise Lawson (2009–2012) Bill Gibson (2011–2014) Margie Parikh (2014–2016) Ellen Pekeles (2017–18) Judi Richardson
History
In 1971, four members of the University of British Columbia Varsity Outdoor Club conceived the idea of a mountain climbing equipment co-op when a snowstorm stranded them on Mount Baker in Washington state. Prior to this they had been purchasing gear at REI in Seattle. Other Varsity Outdoor Club members joined the plan and MEC was formed. The organization was incorporated under the British Columbia Co-operative Associations Act, with a constitution that was originally written by co-founder Jim Byers.
1972–2000 The MEC's first physical store was opened in 1972 on West Hastings Street in Vancouver. By 1981, it had opened a store in Calgary and had 57,000 members. MEC established its third retail location in Toronto, in 1985. By 1992, MEC's sales had increased to more than $35-million and had 330,000 members. Hudson's Bay Company executive Bill Gibson was hired from outside the organization and within a few years he had opened stores in Ottawa and Edmonton.
2000–2015
Peter Robinson was CEO from 2000 to 2007, until he was replaced by David Labistour in 2007.
Gibson moved to the board in 2000 for a dozen years, which he chaired between 2009 and 2012.
Serratus Mountain Products Ltd. and "the following substantially inactive companies": 330204 British Columbia Ltd., 340070 British Columbia Ltd. and 1314625 Ontario Limited were as of December 29, 2002 wholly owned subsidiaries of MEC.
Festivals In 2006 MEC began a national program of outdoor "festivals" in every city in Canada that the organization had a store. MEC Paddlefest was the first of these, followed in 2008 by MEC Bikefest, which was initially run in six cities and later expanded. MEC launched its third festival, MEC Snowfest, in all MEC store cities during the winter of 2011.
Expanded product lines From 2009 to 2011 MEC expanded its traditional back-country products to include urban outdoor pursuits. Road running, bicycles and yoga apparel were introduced and became significant components of MEC's marketing focus.
In November 2009, MEC entered the bicycle retail market. This move was resisted by some suppliers of bicycle components, who refused to ship to MEC. One Quebec distributor ceased doing business with a bicycle manufacturer when that company decided to supply MEC. At that time, MEC had 11 retail outlets and about $265 million in sales. The CEO of MEC remarked that the industry had been given two years' notice about MEC's plans to enter the bicycle market. For its initial bicycles offered, MEC contracted with a Taiwanese manufacturer to build a bicycle line under MEC's own brand. MEC planned to sell $4 million worth of bicycles in its first year.