VANCOUVER —
Mountain Equipment Co-op says its board of directors has unanimously approved a deal in which a Los Angeles-based private investment firm will acquire MEC’s assets, including the majority of its retail stores.
Vancouver-based MEC says the transition from a co-operative structure to a subsidiary of Kingswood Capital Management is needed to ensure a stable future for the business.
The retailer said it has been granted court protection under the Companies’ Creditors Arrangement Act (CCAA), allowing it to continue operating e-commerce and retail stores while the transaction and other elements of the plan are completed. It says it will accept gift cards and honour warranties during this period.
No financial details were disclosed.
Kingswood managing partner Alex Wolf said in a statement he is “honoured” to work with his new Canadian operating partners and that his company is committed to continue to “inspire and equip” Canadians who enjoy an active outdoor lifestyle.
Long-standing MEC member and Canadian Eric Claus will lead Kingswood’s newly formed Canadian affiliate as chair and CEO.
MEC chair Judi Richardson said the “difficult decision” to sell MEC follows an extensive examination of options after the company was unable to overcome years of persistent financial challenges made worse by the impact of the COVID-19 pandemic.
Richardson said in an interview that although she could not speak for Kingswood’s future plans, the due-diligence discussions between MEC and Kingswood had indicated Kingswood was the bidder most likely to preserve the highest employment levels and number of stores.
During the creditor protection process, Kingswood will negotiate with landlords on preserving the footprint of at least 17 stores, she said.
“With the announced sale, we’ve essentially preserved a high number of stores — so a large bricks-and-mortar footprint across Canada — and will also preserve a number of employment opportunities for our current employees. And we believe that we’re really paving the way to the possibility of another 50 years of legacy,” Richardson said.
Although the deal represents the second CEO shakeup in as many years, Richardson said she is hopeful that members of MEC’s current executive leadership will stay with the company (even if the elected board does not). Richardson said that during discussions with the board, new CEO and board chairman Claus proved to be an “outdoor person” and also has co-op experience, having led Co-Op Atlantic as chief executive.
“We did bring in new leadership under Phil Arrata. He joined in July of 2019, and he and the team put a turnaround plan together — and they were executing, and executing well, on that turnaround strategy,” said Richardson.
Richardson said the company will likely continue with some of the plans that were already in place, including re-evaluating the types of products offered and the number of products offered in each category, as well as the supply chain. The creditor protection process will also help reduce the company’s debt, she said, as well as high “fixed costs” and inefficiencies.
“Kingswood themselves are putting some financial resources into this transaction, but they are not operating the business. And so they have partnered with (Claus)… and he’s very passionate about MEC,” said Richardson.
“I do believe that they have every intention of carrying on with the MEC purpose.”
During the transition from a co-operative to a private company, Richardson said, members would have to claim themselves as creditors to stake a claim on their $5 shares unless Kingswood decides on an alternative way to compensate the members (who become ordinary customers of the private business).
Alvarez & Marsal Canada Inc. has been appointed by the court as the monitor under the CCAA proceedings.
The transaction remains subject to regulatory approvals and is expected to close in the fourth quarter of 2020.
— With files from Anita Balakrishnan in Toronto.
This report by The Canadian Press was first published Sept. 14, 2020.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
