Loading articles...

MEC fighting to 'keep the lights on'

Last Updated May 19, 2020 at 5:11 am PST

FILE - The outside of a Mountain Equipment Co-Op is seen in North Vancouver, Monday, Dec. 9, 2017. Mountain Equipment Co-op says it's made major changes, including looking to move its head office, as it seeks to become profitable and stay viable. THE CANADIAN PRESS/Jonathan Hayward
Summary

MEC has laid off hundreds of frontline staff

MEC store staff, head office, service centre and warehouse laid off

Canada’s outdoor coop is in dire financial straits

VANCOUVER (NEWS 1130) — Hundreds of people have been laid off, but national outdoor retailer Mountain Equipment Co-op says it is still in dire financial straits and is struggling to “keep its lights on.”

The company, which is based in Vancouver, is Canada’s largest cooperative by membership, sporting more than 3.5 million members, though only a small number are active shoppers.

Last year, MEC, which marks its 50th anniversary in 2021, reported $11.5 million in revenue loss.

A financial restructuring was already underway; MEC had done away with its casual workforce in January, offering those staff full- and part-time positions instead, which also resulted in a number of layoffs earlier in 2020.

“We deployed several initiatives in the past few months to support our turnaround. We also had a plan as to the next set of initiatives which we were going to pursue. Those plans have now been put on the backburner. It goes without saying that COVID-19 has increased the pressure we’re under,” says an update on the company’s website.

Online, loyal members and ex-staffers are reacting with sadness but not surprise.

“Not only does MEC need revenues to ‘keep the lights on,’ as they put it, they need to raise that revenue in a business environment where competitors are overstocked and also slashing prices, low consumer confidence, high unemployment with low disposable income and stay at home orders crushing demand,” says Niv Froelich, a former MEC advisor.

Just one month ago, a new flagship store opened in Vancouver’s Olympic Village, the latest in a string of new bricks and mortar stores the chain invested in, even as online giants like Amazon chipped away at store sales.

“These stores were financed through real-estate sales putting strain on the balance sheet. In addition, comp sales flattened resulting in cash flow challenges,” says MEC.

While MEC has been repeatedly recognized as one of Canada and B.C.’s top employers, the company was embroiled in controversy as staff in some stores moved to unionize amid growing internal tensions.

MEC says it paid all staff who were out of work for the first two weeks of shut downs, but layoffs were necessary to “protect MEC and jobs over the long-term.”

MEC was listed as employing around 2,000 Canadians before January’s restructuring.

Staff at Vancouver’s head office and call centre on Great Northern Way have also been impacted by cutbacks, as have some workers at a distribution centre in Surrey.

Editor’s note: This article has been updated to correct Niv Froelich’s title.