MEC got lost in the woods. Has it found its way back to the path?

Like just about every outdoorsy Canadian kid, J.P. Roy grew up shopping at Mountain Equipment Co-op, better known to its millions of members as MEC. After university he left the country to pursue a career in the action sports industry. As he moved from Germany to China to California, so did a few key pieces of his MEC gear.

Every time Roy looked at the mountain logo on his backpack or tent it reminded him of home. And so, after 16 years away, one of the first things he did after moving back to Vancouver in 2020 was walk into a MEC store.

“I remember thinking a lot had changed,” he says. “And not for the better.”

While Roy was out of the country, MEC had ditched the mountain from its logo and diversified into the urban jungle, selling everything from road bikes to yoga mats. It expanded aggressively and expensively, often building new locations from scratch. And while it focused exclusively on the Canadian market, global outdoor retailers—both online and brick-and-mortar—were moving into its backyard.

It was an unsustainable mix, especially during a global pandemic. Between 2016 and mid-2020, MEC lost more than $100 million. Its board declared bankruptcy in September 2020 and sold the company to Kingswood Capital Management, a private equity firm based in California, for a reported $150 million. Kings-wood renamed it Mountain Equipment Company, retaining the MEC acronym.

A few months later, a new executive group brought Roy on as the senior director of MEC Label. He’s responsible for all of the private label pro-ducts—the gear and clothing with the MEC logo on it that accounts for about a third of the company’s business. Roy’s is a key position in the quest to rejuvenate the iconic brand.

“We were trying to be every-thing to everyone,” he says. “Four years later we feel like we’re now going in the right direction.”

Not everyone is convinced.

When Roy started work in early 2021, the primary focus was on triage.

During the bankruptcy, key staff quit or were laid off. Product ordering deadlines were occasionally missed. At the same time, booming demand and global supply chain challenges made it hard for any outdoor store to keep the shelves fully stocked.

There were some positives. Bankruptcy protection allowed MEC room to streamline its operations, renegotiate with vendors and cut costs. Kingswood provided enough money for MEC to pay its debts. But it was still a scramble to redevelop the private label.

“Which was a good thing,” Roy says, “because it gave us no choice but to focus on what is important.”

In general, there were too many products and not enough focus on the shoppers who drove MEC’s brand, if not its actual sales, explains David Ian Gray, a retail strategist who has worked with MEC CEOs in the past. He says MEC relies on two types of consumers: the experts and backcountry campers and the more dabbling daytrippers or frontcountry recreationalists.

“MEC needs the hardcore enthusiasts to say they approve of their products to create the brand cachet that tells the frontcountry enthusiasts it’s okay to shop there,” says Gray, the principal at DIG360. “The frontcountry shoppers subsidize the core membership.”

On the private label side, Roy eliminated 25 percent of the products. He likens the outcome to a restaurant that refines its menu from 10 pages down to one. “You go from being overwhelmed by choice to, ‘Okay, I know exactly what these guys do,’” he says.

To that point, in October 2021 MEC brought the mountain back to its logo with a full rebranding. Roy says the move signalled to MEC’s core market that the company was returning to its roots as a provider of high-quality outdoor clothing and gear at an affordable price.

By 2023 the accumulation of changes was paying off. MEC won’t share financial information, but Roy says the company was profitable last year. It topped the 2023 Gustavson Brand Trust Index. And the company opened a new store in Moncton, New Brunswick—its first expansion since the acquisition—and another in Whitby, Ontario, earlier this year. There are now 23 standalone MEC stores in Canada—five of which are in B.C—plus three HBC store-in-stores in the GTA.

Last fall, CEO Peter Hlynsky said the plan is to increase the store count to about 40 by 2028. The company says the next new store will be in B.C., likely in Nanaimo. Hlynsky notes that opening stores in new markets tends to also increase online sales, which already account for a third of MEC’s business.

The turnaround is particularly impressive when compared to the larger outdoor industry. After record revenues during the pandemic, in 2023 many of MEC’s suppliers and competitors posted financial losses and announced layoffs. REI, MEC’s American doppel-gänger, is closing stores and laying off staff at the head office.

MEC is also up against more competition than ever before. Decathlon, an outdoor sporting retailer with 1,700 stores in 70 countries, has opened 20 stores across Canada in the last few years, including its newest in Metrotown, a short drive from MEC’s head office. Decathlon mostly focuses on entry-level products at relatively low prices.

Roy says that’s a point of differentiation. MEC products tend to be higher quality and more specialty focused. And its sales staff have expertise and knowledge the staff at Decathlon can’t match.

“I think we sit perfectly between the high-end Arc’teryx and the disposable Woods and Decathlon,” he says.

David Ian Gray thinks there’s still more MEC can do to carve out its niche. The new private label products are too high- or low-end and are not in MEC’s sweet spot, he says. And, even more importantly, the company desperately needs to invest in technology—every-thing from supply chain to customer-facing solutions. He’s not sure if Kingswood is ready to make that level of investment, especially in these challenging times.

At MEC’s head office, Roy remains upbeat. He knows the co-op got lost in the woods, but he’s equally confident that the company is now back on the path.

“I know consumers have more options than ever for outdoor gear,” he says. “It’s my job to make sure we offer compelling options they can’t find anywhere else.”

That was the vision when a few University of British Columbia students founded MEC back in 1971. But it’s not yet clear if that’s enough for the Mountain Equipment Company to survive the next 50 years.