MEC Suppliers Sue over Unpaid Merch as Sale Rumors Swirl

As financial pressures mount, Vancouver’s Mountain Equipment Co. (MEC) is under fire from suppliers over unpaid bills, with several lawsuits filed and the company reportedly exploring a sale for the second time in five years.

Several suppliers of the iconic Canadian outdoor retailer MEC say the company is behind on payments, prompting a wave of lawsuits from businesses large and small. The financial strain comes as the 54-year-old company is rumored to be seeking a corporate sale, its second in half a decade.

Lever Style Files $1.3M Lawsuit 

The most significant legal action comes from Hong Kong-based Lever Style Ltd., which filed a lawsuit in the B.C. Supreme Court on February 12 seeking more than $1.3 million. Lever Style Ltd. alleges that MEC failed to fully pay dozens of invoices sent in September and October. 

According to the notice of civil claim, MEC paid Lever Style Ltd. US$295,997.67, but US$917,452.77 remains outstanding. The lawsuit states that MEC has “acknowledged liability for the outstanding balance,” but “asserted that the only reason the outstanding balance has not been paid is because MEC and/or MEC Holdings does not have the financial capabilities to pay.”

MEC Response and Sale Rumors

MEC spokeswoman Jo Salamon responded to inquiries from BIV, stating, “as MEC is a privately held company, it doesn’t comment on business.” She added, “regarding speculation on MEC being sold—there is no news to share.”

Other suppliers have filed lawsuits for smaller amounts. Jonathan Cotton, director of operations at FixnZip (an Oregon-based maker of zipper repair kits), said, “Our outstanding invoice is for a whopping US$2,100 so it is nothing like that million-dollar lawsuit.” Cotton described a pattern of delayed payments and changing timelines: “It’s hard to get responses from them, and it’s usually an evolving, changing story, where they give us a date for what they’re going to do, and then when we get there, they need more time.” FixnZip sent MEC supplies in April, and MEC’s latest proposal was to start paying US$100 each month starting in March, with the balance due in December.

Smaller Suppliers Also Await Payment

Vancouver-based socks and slippers maker Polar Feet claims it has been waiting to be fully paid for sock shipments since invoicing MEC in late October 2023. In a lawsuit filed January 29 in B.C. Small Claims Court, Polar Feet said it invoiced MEC for $63,510.59 but was only paid $40,485.59. The lawsuit sought $26,294.59, after adding service fees and interest. “I think they have not paid because they think Polar Feet is insignificant and can be put off indefinitely,” Polar Feet said in its notice of claim. “They promised to pay three times but did not pay, nor did they get in touch as they promised.” 

However, Polar Feet owner Lisa Falconer later emailed BIV to say that while MEC had still not paid the outstanding balance, she and MEC had “come to an agreement” and she planned to discontinue her lawsuit. “They seem to be making an effort to close outstanding claims and to revitalize the business,” Falconer said.

U.K.-based Lifemarque Ltd., which makes outdoor survival products, filed a lawsuit against MEC on January 27. Lifemarque Ltd.’s lawsuit said it sent US$27,000.28 worth of products to MEC last March and April. “MEC has neglected or refused to pay the indebtedness, despite its obligations under the agreement and multiple demands by Lifemarque Ltd. that it do so,” Lifemarque Ltd. said in its lawsuit.

Legal and Industry Context

Some observers have suggested that U.S. retailer Recreational Equipment Inc. (REI) would make a good corporate parent for MEC. David Ian Gray doubts that the transaction would materialize.

“REI has been struggling themselves for a bit, so they wouldn’t be in a position where they could make an acquisition like that,” he said. “A new buyer for MEC is probably going to be another private equity company. The starter list for that could be the ones that missed out in the last go-round.”

None of the allegations in the lawsuits have been proven in court.