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David Labistour, CEO of Mountain Equipment Co-opLAURA LEYSHON

Sitting in his small office at Mountain Equipment Co-op headquarters, a backcountry splitboard in one corner, a city bike in the other, chief executive officer David Labistour is dressed in a sweater, jeans and sneakers - and he's quoting Jack Welch.

Mr. Labistour, on the job three years, has spent his tenure reinventing the 40-year-old co-operative for the 21st century. The head of the country's top retailer of outdoor gear lays out the challenge faced by MEC and many Canadian businesses by citing former General Electric CEO Mr. Welch: "When the rate of change externally exceeds the rate of change internally, the end is nigh."

MEC faces the same external changes that challenge most Canadian retailers. Entrenched ways of doing business are being upended by demographic shifts that are transforming the country into one that's far less white and much more urban. For sellers of outdoor equipment, that could mean less interest in sports such as extreme skiing, maybe even hockey.

This seller of gear for the hard-core - rock climbers, backcountry skiers - is in the midst of a full rethink of its products. The overhaul started with the sale of bicycles, and plans include adding more colours and chic to the apparel on offer. Details throughout the stores are being assessed, such as shelves full of trail-running shoes when running in cities has become much more common.

Mr. Labistour's delicate balance: Retool MEC's offerings, carefully stoke change in the co-op's culture, but maintain its core philosophy.

"People's leisure habits - the way they spend their time and money - is changing quite dramatically," Mr. Labistour said. "And we know Canada's primarily urban. The youth are less active than they were. And society, generally, doesn't want delayed gratification."

MEC was born in a storm in the backcountry. In 1970, four mountain climbers, students at the University of British Columbia, were hunkered down during inclement weather in their tent at the base of a glacier on Mount Baker in Washington state. They'd been buying their gear in Seattle and were tired of it. They talked of their percolating idea to open an outfitter in Vancouver to sell quality backcountry goods at a reasonable price, and decided to take action.

Four decades later, MEC has just opened its 14th store, in Barrie, Ont., north of Toronto, and boasts 3.3 million members and annual sales of more than $260-million. The cost for a lifetime membership in the co-op - required to make a purchase - remains $5, the original price.

Today, MEC is grappling with the "classic brand dilemma" - changing, yet not changing - said David Kincaid, former head of marketing at Labatt. He points to Harley-Davidson Inc., long-time client of his consulting firm Level Five Strategic Brand Advisors.

The maker of big hogs was experiencing slower growth, so it expanded the idea of what Harley-Davidson was: not just bikes, but the "motorcycle lifestyle." Now a quarter of Harley's revenue comes from the sale of parts, accessories and merchandise. "It's no longer only the motorcycle," said Mr. Kincaid.

MEC - whose ethos is "self-propelled" sport - also has to think about "the lifestyle, not just the recreational activity," he advised.

The aging of its dedicated customer base is another of the key demographic challenges facing MEC, said James Smerdon, a director of retail and strategic planning at Colliers International Consulting, who has done work for the co-op.

"With the baby boomers just hitting retirement - are they going to be ice-climbing?" asked Mr. Smerdon. "Some of them may be, but for the most part they're going to look for more leisurely recreational pursuits."

Mr. Labistour - guided by MEC's mission to get people active and outdoors - describes running, bicycling and light hiking as "gateway" activities to the more adventuresome pursuits he said will remain the co-op's bedrock.

"When we look back at the founders of MEC, we focus on the physical aspect: mountaineers, in a tent, in a storm. But what we don't look at is the spirit of those people. They were young, they were active, they were adventurers, they were entrepreneurial - and they were social, they had a lot of fun. That's the spirit we need to embody."

As MEC works through its rethink, the egalitarian and green-minded co-operative also battles a small backlash. Last year, for instance, when MEC introduced bicycles, small independent bike shops raged against the "Wal-Mart" of outdoor gear tramping onto their turf.

Through the years, there's been internal dissent as well, as MEC evolved into a mainstream retailer. Sara Golling has watched the co-op from the start. She is an MEC co-founder and has served on the board in several stints, including the past several years. "It's been a natural evolution," she said. She has no time for the too-much-change line of criticism.

"You mean naysayers who really miss the good ol' days when we had one tiny store and were known as 'Out-of-Equipment Co-op' and there were a few floor staff who felt they were fulfilling job requirements by standing around the store gabbing with each other about their climbing exploits and ignoring members who wanted some assistance?" asked Ms. Golling.

Mr. Labistour, 55, arrived in Canada in 1999 from his native South Africa, where he worked at Adidas and was a senior merchandiser for Woolworths, one of that country's top retailers. After struggling to find work in Canada, he caught on as a consultant to Aritzia, the women's fashion chain. In 2003 he joined MEC as senior manager of buying and design. When Mr. Labistour was hired as CEO, he was the first non-outsider to be handed the job. So in his quest for change, he doesn't arrive as a marauding outsider - he understands the company's culture.

Change is pursued "in a conservative way," he said. Planning for the current modifications began three years ago when he became CEO. The project has picked up speed in the past year, with a particular focus not only on design and products but on instilling a change in thinking among 1,400 employees. "We want to retain the authenticity of the culture while shifting it."

One of the more important projects is the backpack, MEC's top-selling product. MEC is reworking the packs, with a particular focus on women. In general, MEC has always approached product design from a "male lens" that emphasized utility over style, but "women want to look good," said Mr. Labistour. "The stuff needs to work - and look good."

Appealing to female consumers goes beyond aesthetics, however. "If you look at the movement of women's hips when they walk, versus a man's hips, women's hips are more dynamic. If you really want to address the gait and comfort, the whole hip belt has to be different," he said.

While backpacks are No. 1 at the co-op, ahead of footwear, apparel is the main product for most outdoors retailers. Mr. Labistour wants to change the co-op's reputation for selling only hardier goods and eschewing fashion. MEC is not going to become Lululemon - but that doesn't mean it shouldn't sell clothing its members can wear to yoga.

"Climbers do yoga," Mr. Labistour said. "Active people in the wilderness, they live in urban environments, they run, they cycle. We always said, 'We'll give you this part of your lifestyle but we won't address that.' To be relevant we have to look at things through our member's lives, not our eyes."

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 7:00pm EDT.

SymbolName% changeLast
GE-N
General Electric Company
-2.55%175.53
HOG-N
Harley-Davidson Inc
+0.18%43.74
WMT-N
Walmart Inc
-0.91%60.17

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