A group of Canadian investors led by textile executive Tim Gu is acquiring Vancouver's Mountain Equipment Co. (MEC) in a deal MEC announced this afternoon.
No sales price was disclosed.
MEC CEO Peter Hlynsky and chief merchandising officer Chris Speyer are also part of this group, according to an MEC press release. Gu is chairman at Unisync Corp. (TSX: UNI), a Canadian uniform-clothing company, as well as an investor in venerable Canadian brands, such as Tilley and Roots.
This is the second day in a row that Canadian investors have bought a legendary Canadian retail company, or its assets. Yesterday, Canadian Tire said it would pay $30 million for intellectual property belonging to the Hudson's Bay Co., which is Canada's oldest company.
BIV first reported in January that MEC was rumoured to be up for sale for the second time in five years and was struggling to generate sufficient cashflow to pay suppliers.
BIV then reported on many suppliers suing MEC over alleged unpaid bills. Hong Kong-based Lever Style Ltd. sought more than $1.3 million.
MEC said today that partnering with Gu and his team strengthens its ability to "reinvest" in domestic manufacturing. Much MEC design work has historically been done in Vancouver, although retail analyst and DIG360 principal David Ian Gray told BIV this afternoon that most of its manufacturing has taken place offshore.
Gu, who also founded and operates Toronto-based clothing manufacturer E.star International Inc. said he has been a lifelong believer in Canadian manufacturing and innovation.
"I’m proud to join MEC’s journey," he said. "Together, we’ll strengthen its foundation, expand its reach, and ensure that MEC remains an essential part of Canada’s outdoor culture for generations to come.”
The move toward investing more heavily in domestic manufacturing is to "enhance the authenticity, quality, and innovation of the MEC Label product line," according to the company.
Other investors in the new ownership group hinted that the upsurge in Canadian nationalism in the face of U.S. President Donald Trump's tariff threats and actions may have helped propel the deal.
“There has never been a better time to celebrate being Canadian” said Hlynsky.
“Today marks the beginning of MEC’s next chapter, grounded in the values that built MEC from the start. We will continue to evolve and innovate in order to stay relevant to the next generation of outdoor enthusiasts, and we will remain true to what sets MEC apart: expert staff who live and breathe the outdoors, stores that are anchors for outdoor communities and an unwavering commitment to providing the best assortment of outdoor gear found anywhere. MEC being back in Canadian hands means we are more committed than ever to equip Canadians for all trails ahead.”
Gray said he thought that while the sentiment about being a great time to be Canadian may be intended to tap into the upsurge in nationalistic sentiment, the transaction's timing was driven not by Trump, but by the "financial distress" that MEC lived under.
"That process to find a buyer started last fall, even before Trump was elected," said Gray, who also is a retail-sector instructor at the Capilano University School of Business.
Indeed, MEC said in its release that the transaction has been in the works for months.
"I'm always happy, even prior to Trump, to see a Canadian headquartered business be owned by Canadians," said Gray. "I like in particular that existing executives are part of the MEC ownership group. That's always encouraging that they see something in the potential for the company."
The 1971-founded MEC in October 2020 won court approval to be sold to Kingswood Capital Management after entering creditor protection. That company is a Los Angeles-based investment firm that has separate owners and no connection to Kingswood Capital Corp. or Kingswood Properties, which are holdings of Vancouver's Segal family.
Alex Wolf, managing partner at Kingswood said in a release that he was pleased with investments made in MEC since Kingswood took it over. He said that resulted in more MEC-brand offerings as well as private-label products.
Wolf added that turning the venture over to the new ownership group made sense because it positions MEC to better grow its presence across Canada.
MEC's website lists 26 stores, although three are store-in-stores within Hudson's Bay locations, so those stores are set to close soon.
