New Mountain Equipment Company CEO Peter Hlynsky grew up with the business. He’s been a member of the Canadian outdoor retailer since 1995, when it was still a co-op, and his family bought their gear from the company before that.
He was recently announced as the new leader of the company, and his vision for MEC is to maintain the same experience for the current customer that he had growing up.
“The beautiful thing about a business that’s 52 years old – you don’t need to radically transform it,” Hlynsky said.
MEC has gone through some significant changes in recent years, moving away from the co-op model that was inspired by how REI operates in the United States, to becoming a company that’s no longer owned by its members.
That change from co-op to company happened in 2020, when MEC sold all of its assets to Kingswood Capital Management, a Los Angeles-based private investment firm.
Now that MEC is privately held, it doesn’t post financial figures, but Hlynsky said annual revenue is between $400 million-$500 million, and closer to the middle of that range.
The company has about 1,600 employees and operates 23 standalone stores as well as three stores within retailer Hudson Bay in the Toronto area.
Hlynsky spoke with The Daily about the transition from co-op to company, playing to MEC’s strengths, and MEC’s expansion plans.
Change from Co-op to Company
Hlynsky has been with MEC since November 2020 as chief financial officer and chief operations officer. He took the CEO reins from Eric Claus, who guided the retailer through its transition from co-op to company, as well as through the industry disruption of the COVID-19 pandemic.
According to Hlynsky, much of what’s different now for the company is in the back office and doesn’t show up for the consumer. Hlynsky wants to keep steering the company in a similar direction to the course it has been on.
“This isn’t a thing where you come in as CEO and you’re trying to transform the business or do something totally different and new with it,” he said. “It’s about sticking to your core and continuing to live by the principles of what the business is founded on.”
The shift in the business structure created a lot of “noise” at first, Hlynsky said.
“A lot of people weren’t sure how it was going to play out,” he added. But the noise faded when people both inside the company and outside of it saw how MEC was operating, according to Hlynsky.
“We have a good group of people running the company that put it on solid ground,” he said. “We focused on our people in our stores, which is the real magic, the secret sauce, and what makes MEC MEC. By doing that, the members didn’t feel the experience changing.”
At the time of the change, MEC had about 5 million members. The business still offers a membership model for customers, and Hlynsky said about 95% of the people who shop in-store sign up for memberships.
According to Hlynsky, traffic has been strong all year.
“The consumer is feeling the effects of higher food and housing prices and they have been shifting their spend from higher-priced, branded product to our MEC Label offerings,” he added. “When economic conditions are tough, we tend to see the consumer shift from high-priced vacations to lower cost alternatives like camping and hiking. This dynamic helps insulate MEC.”
Sticking to MEC’s Strengths
To Hlynsky, one of MEC’s main strong points is the people on the sales team who can give consumers a valuable experience when they’re looking for a particular product, both in-store and online.
“We have a great retail footprint, and we have a great online business,” Hlynsky said. “We utilize both of those to give members the best choice and the best service for when they’re trying to find their product.”
He gave an example of a customer walking into the store with a smartphone in their hand and showing a retail worker a picture of a backpack on the MEC website. “They say, ‘I’m looking to buy this gear, but I don’t know how it fits,’” Hlynsky said. “That’s what we do – we give that true omnichannel experience.”
As far as products are concerned, MEC guarantees its merchandise, which means it has to meet a minimum threshold for good quality, according to Hlynsky. MEC offers gear for beginners all the way up to experts.
The MEC branded products are “foundational” to the business, Hlynsky said, and make up about one-third of the business across all categories. The one category MEC doesn’t produce is footwear.
E-commerce makes up about one-third of MEC sales, including in-store pickup and home delivery. MEC sees e-commerce as an important component of its omnichannel strategy.
Hlynsky said MEC has a broad assortment of outdoor gear that allows consumers to find products that fit their budget.
“The consumer in our stores is looking for quality, value, and innovation,” he added. “The brands with products or brand values that deliver on those three attributes are performing well.”
Workers Who Walk the Walk
If MEC’s business model sounds familiar to a U.S. outdoors enthusiast who likes to shop at REI, that’s by design. When MEC started, the founders would travel from Canada to the U.S., buy merchandise at REI, then drive it up north and sell it in their van.
Similar to how REI is known for its retail workers in green vests who are proficient at answering customers’ questions, “our staff is highly knowledgeable,” Hlynsky said.
A lot of stores are trying to create “experiential retail,” Hlynsky added. For MEC, that means having workers who can talk about how they’ve used pieces of equipment or apparel to go on adventures and share that with a customer.
“They’ve done trips, they’ve been backpacking or paddling,” he said. “They’ve done all these things that will help people understand how to use the product.”
To aid in that product knowledge, MEC provides field days for staff to test out gear. Workers can also borrow equipment from the store’s gear lockers to take on hikes or camping trips.
“We do a lot of things to really ensure that our staff have good product knowledge,” Hlynsky said.
MEC Expansion Plans
Looking ahead, MEC is planning to add two or three stores a year, with no plans to expand outside of Canada. Hlynsky said the company is close to signing another location in the coming weeks and has leads on a few others that will “hopefully open up next year.”
“We’ve got a pretty big pipeline of what we’re trying to do to grow the business right now,” he added.
Bart Schaneman can be reached at email@example.com.