The Mountain Equipment Co-op, a blockaded outdoor retailer, opposes a proposed delay in selling the company to a US private equity firm, saying there is a “very urgent need” for the deal.
Save MEC campaigner Kevin Harding filed a request in British Columbia court last week to delay the sale to California-based Kingswood Capital Management, as part of an effort to preserve the retailer’s position as a collaborative company.
The group said it wanted to “explore alternative options to address the Ministry of Economy and Trade’s liquidity issues,” including selling real estate, obtaining operating loans, and introducing a credit card rewards program.
In a response provided Monday, the company questioned the group’s ability to help address cash flow issues at MEC, stating that the proposed sources of potential funding do not involve “tangible commitments or realistic options.”
Given the number of factors that must be addressed before closing the sale, including negotiations with owners, the proposed delay would put the deal at risk, the Vancouver-based company said.
The MEC said it is essential to close the sale before the retailer faces “significant weekly losses in cash flow”, which could be exacerbated by the spike in COVID-19 rates.
The company added that there is a “real risk” that the delay could lead to the closure of Middle East Exhibitions Company’s operations.
“The deal must be closed in time before MEC’s expected losses mount and for the buyer to benefit from the upcoming holiday sales periods,” MEC said in the court note.
The 49-year-old retailer has its roots in a group of West Coast mountaineers who came up with the idea of opening an outdoor entertainment store in Canada during a climbing expedition to Mount Baker in Washington state.
The popular cooperative was officially launched in 1971 with six members and about $ 65 in operating capital.