Mountain Equipment Co-op CEO David Labistour sidesteps obstacles as he manoeuvres around the renovated auto parts warehouse that has served as his company’s headquarters since 1999.
The 43,000-square-foot site on West Fourth Avenue appears large at first glance.
Closer inspection, however, reveals that many of the 228 employees who work in the facility have little space and others have cubicles piled high with papers or MEC products. Hallways are narrow and meeting space is sparse.
“We’re really cramped for space,” Labistour tells a visitor as he opens the door to a storage room. “We’re zoned light industrial so the city requires a certain amount of space be used as a warehouse. What we need, though, is more office space.”
The outdoor equipment manufacturer and retailer’s space constraint will be solved by 2014 when MEC moves to a larger built-to-suit headquarters at 1077 Great Northern Way on land that the company purchased in 2008.
Proscenium Architecture has applied for the City of Vancouver to rezone MEC’s Great Northern Way site to increase the amount of office space allowed and MEC submitted a detailed development proposal in July.
Labistour expects to raise company revenue more than 5% to $275 million this year and for his company to continue to increase sales and new hires in the years ahead.
“We have about 1,800 employees, and we’re hiring quite a few people now,” he said.
The 40-year-old company’s 15th store is set to open in London, Ontario, early this fall, and Labistour envisions more stores opening in the years ahead.
“We don’t look to grow. We look to improve our service. That’s a different paradigm. Improving service means that you pursue development and growth in a different way.”
The rapid increase in online sales makes it easier for MEC to track where customers live and where successful future locations could be.
Offering free shipping has helped its online offerings rise to be 13% of overall sales.
Labistour calls his company’s free shipping offer a “trial,” but he readily admits that major competitors – L.L.Bean Inc., Backcountry.com and even Lululemon Athletica Inc. – offer free shipping and that it is something that consumers increasingly expect.
Customers also expect outdoor adventure clothing to be more fashionable than it was 10 years ago.
Bottom line: MEC has had to upgrade its fashion designs.
“We’ve always had high-quality, functional products, but they’ve always been slightly pedestrian,” Labistour said. “We’re not trying to be Lululemon. We’ve always provided great products for people who live outdoor lifestyles. What Lululemon has done, though, is show us that people who are active want stuff that looks attractive.”
Dressed casually yet fashionably in a loose-fitting summer shirt, Labistour is the archtype of the kind of customer his company is targeting.
His spacious office contains tell-tale signs of his personal passion for outdoor living: skis and a snowboard are propped in one corner across from a bicycle resting against a wall.
His current favourite past-time is kite-boarding, which is similar to water surfing but employs a large kite instead of a boat to pull board and rider.
MEC’s customers, he believes, similarly split themselves between a lot more outdoor activities than their predecessors in the 1970s and 1980s who spent most of their recreational time rock climbing.
It was snowboarding, however, that first prompted Labistour to visit Vancouver.
The South African made regular trips to California’s Lake Tahoe to ski and visit a friend. In 1997, he decided to explore the rest of the U.S.A.’s Pacific Northwest and wound up in Vancouver, where he immediately felt at home. By 1999, Labistour’s immigration to Canada was approved and he arrived jobless, without contacts and unsure of his future.
“Sometimes in life, you’re ready for a change,” the 55-year-old said. “I didn’t leave [to get away from] Capetown. I moved to Vancouver.”
In South Africa, Labistour held senior merchandising positions with Woolworths and was the head of apparel, in charge of design, procurement and production for Adidas’ sub-Saharan Africa division.
Before joining MEC, he was a consultant for Vancouver-based Aritzia, where he helped devise product development structures and processes.
“He’s very creative and has a lot of courage to do the right thing [for the environment],” said MacKay & Associates CEO Nancy MacKay.
MEC donates 1% of gross sales to causes such as wilderness conservation.
“On the passion scale, he’s way up there,” MacKay said. “He lives and breathes the business. He’s very active and is a strong advocate for the environment and of people leading healthy lifestyles.”
She has a better sense of CEO strengths than most people do given that her company coaches and facilitates eight CEO networks made up of 100 CEOs across Canada.
Since Labistour assumed MEC’s corporate reins at the start of 2008, he has expanded some internal initiatives such as a kayak-loan program under which employees can book kayaks and canoes for the weekend for free.
He has also expanded the business by opening new stores in Burlington and Barrie, Ontario, and Longueuil, Quebec. Those initiatives have increased the share of overall MEC revenue that comes from Ontario to 27% while reducing percentage that comes from B.C. to 25.
B.C.’s reduced influence on overall MEC sales is one reason why Labistour is not concerned that B.C. voters rejected the harmonized sales tax (HST) in the recent referendum.
He supported the HST because he believes it:
•taxes the wealthy more than the poor;
•improves business productivity; and
•taxes the consumption of wealth instead of the creation of wealth.
MEC manufactures about 50% of its products, but, given that only 17% of that manufacturing is done in B.C., the company will not be hit as hard by the rejection of the HST as manufacturers who will lose HST tax credits whenever they buy new equipment. Most MEC products are subject to the future 7% provincial sales tax (PST) so he said there will be little cost saving for shoppers.
“Without the HST, it will be a bit more complex,” he said. “But we trade in most provinces across Canada, so we already manage different taxes across jurisdictions.” •