4 ms·

A Canadian company in the same space, Mountain Equipment Co-Op, was recently acquired by a hedge fund and is in the process of mutating into a for-profit compan

A Canadian company in the same space, Mountain Equipment Co-Op, was recently acquired by a hedge fund and is in the process of mutating into a for-profit company, to the dismay of many. https://www.outsideonline.com/business-journal/retailers/mec-sold-to-american-investment-firm/ https://www.outsideonline.com/business-journal/retailers/mec... Is REI being zombified the same way?

JALTU 3y ago
Darn. I have always appreciated MEC...
- evntdrvn 3y ago
  Same, dang
- notatoad 3y ago
  From what i can tell, MEC is generally doing better after being acquired (and IIRC shutting down some stores). before bankruptcy, their own-brand products were seriously dipping in quality and the stores seemed to be shifting more towards premium athlesiure rather than proper outdoor gear. post bankruptcy they're rebuilding their own-label stuff, and at least in calgary there seems to be more staff in the store and the product mix is shifting back towards stuff i can't find in other local stores.
andrewflnr 3y ago
A co-op being acquired by a hedge fund should not be possible. What the hell?
- refurb 3y ago
  Why not? A co-op is just a business owned by it's members. If the members decide to sell (through the board of directors), they it gets sold. "yesterday a unanimous decision by its board of directors to sell substantially all of its assets to Kingswood Capital Management"
  - deleted 3y ago
    [deleted]
  - schemescape 3y ago
    Wow, that link indicates that members likely won’t get anything, even their $5 share, back. So who is benefitting from the sale?
    - bombcar 3y ago
      Obviously the board of directors.
    - sokoloff 3y ago
      > The struggling Canadian retailer… > the elimination of the co-op structure is “needed to ensure a stable future for MEC’s retail business.” In 2019, the retailer lost a reported $11.487 million on annual sales of $462 million, a slide that capped years of disappointing performance for the company > In the end, however, the board concluded that the only realistic path forward was a sale to Kingswood. Doesn’t sound like there were a lot of bidders clamoring to take it over. Holders of $5 shares may have had a realistic option to get $0 by not selling or $0 by selling.
    - deleted 3y ago
      [deleted]

JALTU 3y ago

Darn. I have always appreciated MEC...

evntdrvn 3y ago
Same, dang
notatoad 3y ago
From what i can tell, MEC is generally doing better after being acquired (and IIRC shutting down some stores). before bankruptcy, their own-brand products were seriously dipping in quality and the stores seemed to be shifting more towards premium athlesiure rather than proper outdoor gear. post bankruptcy they're rebuilding their own-label stuff, and at least in calgary there seems to be more staff in the store and the product mix is shifting back towards stuff i can't find in other local stores.

andrewflnr 3y ago

A co-op being acquired by a hedge fund should not be possible. What the hell?

refurb 3y ago
Why not? A co-op is just a business owned by it's members. If the members decide to sell (through the board of directors), they it gets sold. "yesterday a unanimous decision by its board of directors to sell substantially all of its assets to Kingswood Capital Management"
- deleted 3y ago
  [deleted]
- schemescape 3y ago
  Wow, that link indicates that members likely won’t get anything, even their $5 share, back. So who is benefitting from the sale?
  - bombcar 3y ago
    Obviously the board of directors.
  - sokoloff 3y ago
    > The struggling Canadian retailer… > the elimination of the co-op structure is “needed to ensure a stable future for MEC’s retail business.” In 2019, the retailer lost a reported $11.487 million on annual sales of $462 million, a slide that capped years of disappointing performance for the company > In the end, however, the board concluded that the only realistic path forward was a sale to Kingswood. Doesn’t sound like there were a lot of bidders clamoring to take it over. Holders of $5 shares may have had a realistic option to get $0 by not selling or $0 by selling.
  - deleted 3y ago
    [deleted]