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The sale of MEC to a foreign investment firm feels like a betrayal – The Globe and Mail

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A MEC store is seen in Vancouver, B.C. on Sept. 15, 2020.

JONATHAN HAYWARD/The Canadian Press

Charlotte Gill is the author of Eating Dirt, a book about trees and tree-planting.

When I walked into Mountain Equipment Co-op for the first time, I’d just been hired as a tree-planter. I was still a teenager and owned little in the way of camping gear. The store was like a small island nation of outdoor enthusiasm. Crossing the threshold was, and still is, like entering a gearhead’s paradise in which every kayak paddle, stove part or topo map known to humanity was within reach. Its sales model was encyclopedic. They sold flashy new lines but also vintage fan favourites, plus all the parts required to repair those items. Each aisle represented an epic adventure waiting to unfold.

Ever since then, I’ve been a heavy MEC user and have amassed a basement full of outdoor equipment, much of it acquired there, some of it still going strong after 30 years of abuse. I’m one of the many customers who still has a square of laminated cardboard, a first membership at “The Co-op,” as it’s still often called, no further modifiers necessary. That membership kept me company through many years of planting trees and through all my travels around the world. The Vancouver store has provisioned me with trail running shoes, ski gloves, sleeping bags, hydration bladders, energy gels, bike pedals, sporks, carry-on bags and multiday backpacks. It’s kept me covered through tears and sweat and shivers, through half a dozen sporting pursuits I never thought I’d even try let alone fall in love with. To me, and to legions of devoted fans, the sale of MEC to an American investment company isn’t just another sign of the retail apocalypse. It’s something like a betrayal.

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MEC was originally the brainchild of six Vancouver mountaineers who started in the 1970s making small, cross-border runs to outdoor equipment retailer REI, whose co-operative structure MEC shares. Gear was bought and sold out of the back of a powder-blue VW van, a replica of which is housed inside the new flagship megastore in Vancouver’s Olympic Village. The first catalogue was a one-page list taped to the door of the Student Union Building at the University of British Columbia, and through its early iterations, the store was run by volunteers.

By the time I discovered MEC 20 years later, it had built a solid trade catering to dirtbag climbers but also to birdwatchers and first-time hikers as well as professional bike couriers and tree-planters like me, all of whom shared an urgent need for comfortable, tough, relatively well-priced equipment. Sales staff knew every product’s precise location, constituent materials and field performance because they’d used it all themselves, often thrashing it to tatters, just as their customers did with repeated use.

The resulting community was a multigenerational, interdisciplinary and remarkably tolerant mixture of experts and beginners, old-school hippies, mountaineers, families and urban weekend warriors. The co-op understood its own history and mandate because its shareholders were also its customers. MEC cared about the environment, and conducted its business accordingly, because its members cared.

Over the years, MEC has donated $44-million to community and conservation groups. Through its endowment fund it has supported the acquisition and preservation of many parks and protected areas. MEC is a founding partner or member of organizations such as Leave No Trace Canada and 1% for the Planet. The co-op has hosted countless races, rides, clinics, meet-ups, gear swaps and outdoor learning programs. Even its warrantied product returns are given to charity.

But MEC seemed to drift from this grassroots ethic over time, a development not lost on its loyal clientele. The co-op faced new competition from online retailers and knock-off brands, some of whom opened their doors just a short jog away. A long reach into streetwear and athleisure markets accompanied several bricks-and-mortar expansions. Enter a new chief executive with big-box credentials.

All of this felt like bloat if not a straying from core values, which also faced scrutiny for their seemingly myopic focus on a white, cis-gendered, thin and able-bodied membership, an oversight that management only began to address very recently. A final irony, the pandemic that brought record numbers of Canadians into the great outdoors this summer was also the force that hastened the demise of the co-op that had equipped them in the first place.

When the sale was announced on Monday, the outcry was swift and passionate. MEC’s five million-plus members were never consulted about the takeover or granted a chance to vote or otherwise rescue their beloved co-operative from $74-million in liabilities. No one agreed to donate their $5 membership shares, nor to give away their consumer data to a foreign-owned private equity firm. At the time of this writing, a petition to block the privatization had reached more than 73,600 signatures.

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Short of a miracle or a successful class action, Kingswood Capital Management will soon own the MEC brand, with “Co-op” removed from its name. This may not be the last stand for the iconic green logo, but it still feels like the beginning of the end for a community institution, a heartbreaking close for the people’s outdoor store.

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Economy

S&P/TSX composite down more than 200 points, U.S. stock markets also fall

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TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.

The S&P/TSX composite index was down 239.24 points at 22,749.04.

In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.

The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.

The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.

The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.

This report by The Canadian Press was first published Sept. 6, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Economy

S&P/TSX composite up more than 150 points, U.S. stock markets also higher

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TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.

The S&P/TSX composite index was up 171.41 points at 23,298.39.

In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.

The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.

The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.

The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.

This report by The Canadian Press was first published Aug. 29, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Investment

Crypto Market Bloodbath Amid Broader Economic Concerns

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Breaking Business News Canada

The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.

The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.

Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.

The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.

Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.

Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.

Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.

Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.

The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.

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