Photo: Contributed
Vancouver-based outdoor equipment retailer MEC plans to sublease its 112,000-square-foot head office, which it built for $28 million and moved into in late 2014.
The company has already started scouting the market for a new headquarters that will be about one-third the size somewhere in Metro Vancouver, CEO Phil Arrata says.
Arrata said that the sublease and new head office will save the company millions of dollars annually—“far less than 10 million, maybe a couple million.”
The 22-store, 2,400-employee retailer, which manufactures about 20 per cent of its products, has struggled financially, losing $11.5 million in its 2018-19 fiscal year, which ended in February.
Arrata would not speculate on how much money the company will lose in its current fiscal year, although he hinted that losses could exceed those of last year. His aim is to get the company to be cash-flow positive in the 2020-21 fiscal year, he said.
One reason that the current fiscal year could be worse than last year is that MEC sold real estate in the 2018-19 fiscal year and booked a one-time capital gain. No such transactions took place this year, he said.
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