MEC, (Mountain Equipment Co-op), Canada’s largest outdoor chain with 22 stores, has postponed its annual general meeting until December 10 as it works to manage challenges related to the coronavirus pandemic.
MEC said on in a statement on its website, “Recognizing the effect of COVID-19 and the all-consuming nature of the pandemic, the Registrar in British Columbia has decided that all co-operatives in the province may postpone their AGMs for a period of six months. As the most prudent course of action in light of the persistent state of uncertainty, MEC has made the difficult decision to postpone its AGM [Annual General Meeting].
“As COVID-19 has flipped the operations of the business on its head, the decision to delay the AGM was the right one. MEC followed in the footsteps of other co-operatives in delaying their AGM to focus on the acute, urgent and time-sensitive challenges stemming from the pandemic. Delaying the release of the board of directors election results until there was clarity around the AGM was necessary to allow all new eligible members to cast votes in accordance with MEC’s Rules of Co-operation.”
Addressing why they haven’t released its financials which were supposed to be made public at the annual meeting, MEC wrote, “COVID-19 had an unprecedented impact on the business community and has forced us to adjust nearly every aspect of our day-to-day operations in a very short period of time. Our focus has remained steadfast on the acute, urgent and time-sensitive challenges stemming from the pandemic. We are working with our independent auditor to finalize our financials and commit to posting results prior to our postponed AGM, as has been our practice in recent years.”
The delay comes as MEC in a statement in April indicating that it was experiencing severe cash flow issues as a result of COVID-19.
The April statement noted that cash flow challenges had already led the co-op to bring in a new management team in mid-2019, including CEO Phil Arrata from Best Buy, to address those financial challenges. A Crunch Time program was launched by the new team to improve the membership experience, merchandising and operational efficiencies, but those plans were “put on the backburner” to address issues surrounding COVID-19.
MEC wrote in April, “The economic impact of COVID-19 on MEC is severe. Our stores are closed and because of this, sales have experienced a drastic decline. There is still no timeline as to when we will be able to reopen stores. We have been given guidance from the government that when we do re-open, social distancing rules will apply. This impacts the decisions and choices we can make.
“The net result for MEC is that it has created significant cash pressure. We made the decision to layoff our store staff after supporting them with pay and benefits during our initial two-week shut-down period. This decision was made to protect MEC and jobs over the long-term.
“MEC also laid off staff at our Head Office, Distribution Centre and Service Centre, as we move into a “keep the lights on” model, with essential services only.
“MEC is working with our partners, advisors and teams to examine every possible avenue of support for our Co-op. Rest assured we are doing our best, based on the latest information, to ensure MEC remains a vibrant and viable organization.”
Photo courtesy MEC