As of January 2024, MEC, also known as Mountain Equipment Company (historically Mountain Equipment Co-op), is for sale again. As a former employee and a person who keeps up with the outdoor retail industry, I have some thoughts. I want to be clear that this is just my opinion and I could be wrong on a few fronts.
What’s Going On?
If you haven’t heard, MEC is up for sale for the second time in less than 5 years. MEC was a member-owned cooperative for almost 40 years. In October 2020, the cooperative was dissolved and the business was sold to Kingswood Capital Management, a private equity firm. According to recent reports, Kingswood notified suppliers on December 27, 2024, that they were putting MEC back up for sale.
In general, the entire outdoor retail industry hasn’t been doing well. American giant REI just laid off 400 people and closed its entire experiences division. Last year, Moosejaw, a big American outdoor retailer with a robust online presence, closed up all of their brick-and-mortar stores and their online shop. Tons of bike brands are also going out of business including BC-founded Rocky Mountain.
My Insider Knowledge
I worked at MEC for nearly a decade in total (from 2007 to 2009 and then from 2012 to 2019). I started in a customer service in a store. Later, I worked as a product copywriter working closely with their buying and design department. In 2019, I resigned to work for myself full-time.
While I worked at MEC my job as a product copywriter required me to chat regularly with their buyers and designers about consumer trends, product ordering, and sourcing. I didn’t work in these areas so I wasn’t involved in the math and finance of it all. But I did learn a lot about how outdoor retailers do business.
I was also an MEC athlete ambassador from 2018 to 2020. I resigned during their first sale because I was upset about the dissolution of the co-op business model and the way that employees were being laid off with little to no severance.
Since 2020, I haven’t had any first-hand knowledge of the inner workings at MEC. But many of my friends continued to work there after I did, so I’ve definitely heard some things. However, I haven’t spoken to any current MEC employees since the most recent sale was announced.
I’ve also continued to follow the outdoor retail industry fairly closely. That’s partially because I’m still interested, but also because I put together weekly gear deals for my Backpacking in BC and Canadian Outdoor Gear Deals newsletters. From following the patterns of sales and clearance events, it’s been obvious to me that MEC hasn’t been doing well since the 2020 sale.
Why MEC Isn’t Doing Well (My Opinion)
While I don’t have any inside info on what is happening with MEC’s finances, I think a few things are influencing the broader outdoor retail space that led to their current financial misfortunes. I’ll start by summarizing the issues they inherited from former management and then give my opinion on why they continue to fail.
Issues Inherited from the Former Management
There was a flurry of news articles speculating about why MEC went into creditor protection and had to be sold in 2020. In general, they can be summarized as:
- expanded into too many locations too fast,
- spent way too much money on real estate for fancy stores and offices,
- high labour costs and staff turnover,
- diversified away from their core outdoor business into other areas that their customers didn’t care about (yoga, casual wear, bike,
- poor trend forecasting
I don’t have a lot to say about which of the factors was more responsible for the downturn because it would only be speculation. However, it’s safe to say that when Kingswood bought MEC in 2020 they knew the company was in the hole financially and they thought they could turn it around, or at least wring some real estate sale money out of it.
Private Equity Ownership Isn’t Long-Term
I won’t pretend to understand the ins and outs of private equity firms. However, it’s pretty clear that they value profits over everything else. When Kingswood bought MEC they admitted they had a 5 year timeline in mind for selling the company.
Kingswood wanted to make it more profitable, then flip to a new owner. It’s similar to the way people buy run-down houses, do a cheap reno, then sell them for way more, but with an outdoor retail company.
Pandemic Hang-Over and Poor Trend Forecasting
During the pandemic (2020 and 2021), most Canadians stayed close to home and began a lot of outdoor hobbies. This necessitated buying new gear.
At the time, retailers like MEC were struggling to keep gear in stock due to global supply chain issues. They ordered whatever they could in the hopes that it would arrive and they would sell it. Outdoor retailers like MEC as well as bike shops and sporting goods stores had record-breaking sales.
But then the pandemic ended. Retailers were stuck watching bulk orders roll in without the same crazy level of demand for sales. They ended up with an overstock of items they had to sell at a discount to get rid of them.
As well, each year retailers have to forecast what sales will be like the following year to figure out what to order and how much of it. One of the factors they use is past sales. This means that now they have to build forecast models using crazy pandemic data as well as pre-pandemic norms that we might not return to.
Even the savviest forecasters were bound to get it wrong using this data, leading to more over-orders that must be sold at a discount or under-orders that make shoppers head elsewhere since they don’t have any stock.
The final issue with the pandemic hang-over is that outdoor gear typically lasts 5 to 15 years. If most people bought a bunch of new gear in 2020/2021 they won’t need new gear for a while and that leads to lower sales.
Rising Cost of Living
Outdoor gear is expensive and is a luxury purchase for most people. Unless you’ve been living under a rock, you’ve heard about the rising cost of living. Grocery prices are way up and are forecast to continue climbing. Rents and real estate are unaffordable. Unemployment is up. People just don’t have as much disposable income to spend on outdoor gear.
Increased Competition From Non-Traditional Discount Retailers
MEC has been around since 1971. They started because there was nowhere to buy specialized outdoor gear in Vancouver. Over the years they continued to stock specialized outdoor gear and besides other small gear shops, there wasn’t really anywhere else to buy that kind of gear.
In the last decade or less, that’s changed. Social media, wellness culture, and the pandemic have made outdoor recreation more popular. And lots of other retailers noticed… especially discount retailers.
You used to have to go to a dedicated outdoor store to buy gear, and the gear you could buy was moderately priced or expensive.
Now, you can buy cheap (in both price and quality) outdoor gear at big box stores, at budget-priced sporting goods stores like Decathlon, and of course on the almighty Amazon. These entrants to the outdoor retail space are (mostly) poor quality and low technology, but most casual consumers don’t care. They only hike or camp a few times a year and want cheap gear.
MEC and other traditional outdoor retailers can’t (or won’t) compete without lowering their prices and quality.
It’s also worth mentioning that while outdoor gear purchased at a discount retailer a decade ago was guaranteed to be garbage, these days, that’s not always the case. Cheap gear has gotten so much better, so consumers find it hard to tell when to buy cheap stuff from Amazon and when to buy from an established outdoor brand.
Brick-and-Mortar Businesses Can’t Compete with E-Commerce
This one isn’t unique to outdoor gear or MEC. Brick-and-mortar stores have lost huge market share to online retailers over the last 10 to 15 years.
Customers say they want to try on or touch products in stores, but then they buy them online elsewhere at lower prices or with better shipping. (This is called “show-rooming”.) The in-store shopping experience is expensive for retailers primarily because of rent and staff.
As well, traditional retailers also have to run an e-commerce division to compete with online-only stores. So they have to have warehouses and shipping systems to accommodate the rapid pace of online shopping.
But many brick-and-mortar retailers like MEC don’t just ship orders from their warehouse. If it’s sold out in the warehouse, but available in a store, they’ll ship it from a store. That means that store staff have to pick, pack, and post orders too.
The whole thing gets complicated, time-consuming, and expensive, especially when you consider MEC’s free shipping policy. For as long as I can remember (but probably for about 10 years) MEC has offered free domestic shipping on orders over $50. For a store that carries $600 tents and $300 jackets, that ends up being almost every order.
In some cases, the retailer will end up taking a loss on the sale since the cost of shipping ate into the profit. But retailers like MEC keep doing it because they have to compete with online and they hope that they can streamline online things enough to make a profit on more orders than they take a loss on.
Focus on High-End Gear
MEC and other outdoor shops know they can’t (or won’t) compete with cheap Chinese-made knock-off gear. So instead they focus on what they do best: carrying specialized, high-end gear. That’s great and it serves their core audience…
But the average consumer doesn’t want or need expensive high-end gear. They need introductory gear that will make it easy for them to do a new outdoor activity and won’t break the bank. They don’t need advanced features and pricey technologies when they are first starting (or if they don’t do the activity often).
I think this has been a problem for other parts of the outdoor industry (especially bikes) more than it has been for MEC since some of their gear is more mid-range than high-end. But it still trickles down to MEC when customers don’t want to spend $500 for a 4-person family camping tent or $150 for a kids snow jacket. At MEC, those might be mid-range, low-tech options… but most consumers still view them as high-end.
Ultralight/Cottage Gear Trend
One of the biggest trends in outdoor gear in the last few years has been ultralight and cottage gear made by small, independent brands. Supporting small businesses is great… but it hurts big gear shops like MEC.
Ultralight and cottage gear is very niche and specialized – it’s not something that the average consumer will want or use. It’s also very expensive to manufacture, making it a risky nightmare for a big company that has to order a lot of it (their factories have minimum orders, unlike cottage companies that sew in-house). As well, it’s often fragile, which is bad for companies with a historically great warranty like MEC. (Their warranty isn’t as good now, sadly.)
MEC and other big brands have to follow trends like this or they look like they are out of date and irrelevant.
But people immersed in the ultralight and cottage gear community are quite snobby. They often reject ultralight gear made by big brands like MEC. This is especially true for UL influencers and prolific posters on UL forums (which is where most people hear about new gear).
That’s understandable since those brands have to make gear that compromises ultralightness or customization to appeal to more customers since they have to order more of each product. But it doesn’t help it sell, which furthers the problem.
Focus on Sustainable/Ethical Gear
I’ve worked in the outdoor industry on and off since 2006. Twenty years ago lots of outdoor brands talked about how they were incorporating recycled content into their clothing, building out fair labour practices in their factories, and donating partial proceeds to social and environmental causes. They were loud about it. And they were proud to make their gear a bit more expensive to incorporate these practices.
Over the last two decades, outdoor brands have continued to do that. Outdoor companies are at the forefront of green technologies like phasing out harmful PFSAs in rainwear and green anodizing for tent poles. But after a while, all the outdoor brands were doing the same environmentally and socially responsible things so they stopped making that as prominent in their marketing. Instead, they focused on why their gear was different than their competitors – not on the things that made it the same.
The result is that current consumers have no idea why outdoor gear from the main brands is expensive. They don’t know that it takes a lot of money to pay factory workers who don’t toil in sweatshops or have to breathe in toxic fumes. Those consumers don’t know that their jacket cost more since it uses less toxic chemicals and recycled materials that keeps plastics out of landfills.
Instead, they just see cheap gear from China on Amazon. Those gear brands make no claims about their environmental and social responsibility (because they can’t!), so consumers don’t even think about it.
Unclear Brand Voice
This is something MEC has struggled with for a long time. They’ve always carried other brands in their stores and usually, those brands are high-end or specialized in their sport. But they’ve also made backpacks, tents, sleeping bags, clothing, and other gear under the MEC Label.
The MEC Label confuses customers. Is it the same tech as the high-end brands but at a more reasonable price? Sometimes, yes. Is it a budget, less technical version of the high-end brand gear? Sometimes, also yes.
This makes it hard for customers to connect with the brand. It has led to perceptions that MEC is less desirable or poor quality.
While they’ve had some hits and misses over the years, I’ve had some amazing MEC pieces made with the same high-end tech as big brands like Arc’teryx. I also have budget gear from MEC that is going strong after decades. However, it takes a while for people to develop brand loyalty, and since MEC’s brand voice is unclear, most customers don’t make it far enough to develop that loyalty.
MAP Pricing Becomes Ubiquitous
If you’ve never worked in retail, you probably have never heard of MAP pricing. MAP pricing is the Minimum Advertised Price a retailer can sell a product for. The MAP price is stipulated in the contract from their supplier and if they sell something for less than their MAP, they are in breach of contract. The industry takes it very seriously.
MAP pricing didn’t used to be very common in outdoor retail. Only a few brands did it. But now, tons of the major outdoor brands all use MAP. At certain times of the year, like Black Friday, if a brand drops its MAP price on something, e.g. a tent, then all retailers can (and do) offer that lower MAP price. So the same tent is always the same price at all retailers, even if it goes on sale.
That’s great for consumers since it gives them a ton of buying options. But for a store like MEC that has to pay store rents and the salaries of in-store customer service staff, that means that they make less money on every sale compared to an online-only retailer like Altitude Sports or Amazon (which carries more and more big outdoor brands than they ever have before).
It also means they have less control over their pricing. Suppliers can lower their MAP pricing on a product with not that much notice, leading to a lower profit for the retailer. It’s worth noting that MAP pricing would run afoul of competition laws in the U.K. and the EU. But MAP pricing is legal in Canada and the USA.
What Next? Where Should We Shop?
Like a lot of MEC employees and members of the outdoors community, I went through a phase where I had a cult-like affection for MEC. (Fun fact, my husband and I went to MEC as part of our first date back in 2003. Don’t worry, we went for dinner first!)
After witnessing the inner workings and ups and downs, the shine faded. I was very upset when MEC was sold and they dissolved the cooperative structure in 2020.
But as the years have passed, I’ve come to accept that MEC is now just another retail store. It doesn’t owe anything to the community. MEC doesn’t need to be a cultural hub. It just needs to sell things that people want to buy. And like any other store, it’s susceptible to economic variations and poor management.
And for that reason, I still shop at MEC sometimes. For a lot of people, MEC is the easiest place to buy outdoor gear. They often have more selection than other stores and they offer good shipping.
But since I live in Squamish now, I tend to make most of my in-person purchases at Valhalla Pure Outfitters, since it’s convenient. Each of their stores across BC is locally owned but their combined purchasing power means they can get access to the latest and greatest gear.
If I have to shop online, I sometimes also buy from Altitude Sports. They are a Quebec-based e-commerce retailer. (Altitude Sports closed their last brick-and-mortar store in 2019). They have a huge selection and stock most major brands. They also have a great return policy.
I also buy online directly from brands I trust and love like Outdoor Research, Patagonia, and Mountain Hardwear.
I still rarely buy cheap outdoor gear from discount stores or Amazon. Quality gear that will last and that is made in an environmentally and socially responsible way is something I value highly.
I definitely appreciate that being able to afford outdoor gear is a barrier to the outdoors. However, if it’s possible, I encourage you to buy quality gear that will last for years instead of cheap, disposable gear from discount stores.
Do your research before you buy something and look for claims about environmental and social responsibility as well as warranties. The oft-repeated maxim is “Buy once, cry once.” You can buy quality gear used or wait for sales. My tips for saving money on outdoor gear has lots of suggestions to avoid paying full price.
Final Thoughts
I know I’ve missed out on a few other factors for MEC’s recent struggles. For example, the way social media has changed marketing and shopping habits or the rise of direct-to-consumer brands. Honestly, I could go on and on about this stuff, since I find it fascinating, but I have to stop somewhere!
While I’m sad to see MEC struggling, I hope they pull through. Yes, it’s just a store. But despite their faults, it’s a pretty great outdoor store. I think that the current management team has turned around a lot of the issues that they inherited from the coop days, but there are likely still hard times ahead. Fingers crossed for them.
As for who I think is going to buy MEC? I have no clue. It’s likely going to be another private equity firm. But it could also be an established retailer like the Forzani group, which owns Canadian Tire, SportChek, and Atmosphere. Like many people, I’m really curious to see what happens next.
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