Mountain Equipment Company (MEC) could be returning to a Canadian owner if Canada’s Competition Bureau approves an offer from Tim Gu, the president of textile manufacturer E.Star International and the principal owner of Smart Investment Ltd., a real estate investment firm.
When reached by the Globe and Mail newspaper, Gu said approvals are still in the works.
“At this time, we are in the process of working through the required regulatory approvals, including the ongoing review by the Competition Bureau,” he told the Globe and Mail. The government agency opened a review of the merger between MEC and an entity called TGI Holding Inc. on April 9.
Ontario-based E.Star International manufactures products in Canada and abroad for Canada Goose, Fila, Reebok, and more, according to its website. Gu is also a co-owner of Tilley, a Canadian apparel brand, according to LinkedIn. And he is the chairman of the board of Unisync Group Ltd., a uniform and apparel company for first responders and the public and private sectors.
An anonymous source told the Globe and Mail that MEC CEO Peter Hlynsky, who took the helm in 2023, will take a minority stake in the company. Los Angeles-based private investment firm Kingswood Capital, its current owner, will maintain a minority stake as well.
Kingswood acquired MEC in 2020 after it filed for creditor protection. The deal meant the former co-op transitioned to a company.
The Globe reported earlier this year that MEC had been seeking a capital infusion because of bloated inventory, declining revenue and declining profits. It also owes vendors large sums of money. A report by the Sports Industry Credit Association that was shared with SESO by a supplier shows MEC owed suppliers more than $94,000 over a five-day period in November.
“For the whole year it’s much more,” the supplier said.
In February, Lever Style Ltd., a Hong Kong-based supplier to MEC, filed a lawsuit seeking more than $1.3 million in unpaid bills.
MEC operates 23 standalone stores across Canada.
“We are committed to supporting MEC’s long-term success and look forward to sharing more when the timing is appropriate,” Gu told the Globe and Mail.
