Mountain Equipment Co. (MEC), the struggling outdoor-gear retail chain, has found a prospective new owner in Tim Gu, a seasoned Canadian textile executive and real estate investor.

A source familiar with the deal told The Globe and Mail that Gu is set to acquire a majority stake in the company, potentially ending months of uncertainty for the iconic retailer.

Gu is best known as the president of textile manufacturer E. Star International and the principal owner of Smart Investment Ltd., a real estate investment firm. The latter company is active in all aspects of real estate, including acquisition, development, property management and leasing. 

His business interests span both Canadian and international markets, and his manufacturing clients include major names such as Canada Goose, Canadian Tire and Walmart.

Gu has acknowledged that he is the prospective buyer of MEC but declined to go into details about the planned purchase.

“At this time, we are in the process of working through the required regulatory approvals, including the ongoing review by the Competition Bureau,” Gu told Globe.

The bureau is reviewing a deal between MEC and a company named TGI Holding.

While the full terms of the agreement remain confidential, MEC spokeswoman Jo Salamon told the Globe that “it’s a Canadian buying group,” but declined to offer further details.

This latest potential transaction comes after MEC’s turbulent few years. The company filed for creditor protection during the COVID-19 pandemic and was subsequently acquired in 2020 by California-based Kingswood Capital Management LP for $150 million. That deal marked the end of MEC’s 49-year history as a co-operative.

Following a brief rebound in 2021, MEC’s fortunes have declined again. By late June 2024, the Vancouver-based company had accumulated $89.2 million in debt with only $6.4 million in cash on hand, according to internal documents reviewed by the Globe. A separate confidential presentation indicated that the business required a capital injection to stabilize its operations, the Globe reported.

“We are committed to supporting MEC’s long-term success and look forward to sharing more when the timing is appropriate,” Gu said.

Gu’s extensive background in the garment industry dates back to 1999. He currently serves as chairman of Unisync Group, a Mississauga, Ont.-based company producing uniforms and apparel for both public and private-sector clients, including first responders.

He also holds a stake in Tilley, the Canadian apparel brand taken over in 2020 by retail veteran Joe Mimran.

As part of the upcoming deal, MEC CEO Peter Hlynsky is expected to invest in a minority stake, and Kingswood will retain a minority shareholder, according to the Globe

The proposed acquisition represents a potential turning point for MEC, offering hope that the brand may yet regain its footing under new Canadian ownership.

Pictured: Interior of an MEC flagship store.

Photo: Naturally Wood

Connect Canada on May 28 | Join Canada’s leading CRE owners, investors, developers, brokers, financiers, and more at Connect Canada on May 28th at Malaparte in Toronto. Register now to catch forecasts from Canadian CRE leaders on market challenges and opportunities, insights into international investing with evolving market dynamics, the outlook for multi-family housing, and much more. www.ConnectCanada2025.com | May 28, 2025 | Toronto.

Photo: MEC

Connect Canada on May 28 | Join Canada’s leading CRE owners, investors, developers, brokers, financiers, and more at Connect Canada on May 28^th at Malaparte in Toronto. Register now to catch forecasts from Canadian CRE leaders on market challenges and opportunities, insights into international investing with evolving market dynamics, the outlook for multifamily housing, and much more. www.ConnectCanada2025.com | May 28, 2025 | Toronto