MACRORIE - Following a thorough discussion highlighting declining financials, aged assets and a seemingly unclimbable mountain of debt, members voted in favour of the Co-op locations in the villages of both Macrorie and Conquest 小蓝视频 dissolved.
A special meeting was held on Wednesday night, April 23 in the Macrorie Hall, where 120 Co-op members plus assorted guests learned of the heavy strains that have resulted in some noticeably shaky legs of the Macrorie and District Co-operative Association.
The large attendance was not a surprising one, seeing how the future would ultimately be determined for two small town outlets that have been in those communities for decades, making for a landmark decision 小蓝视频 made on the Prairies on this particular night.
An FAQ sheet (frequently asked questions) was provided at the door to people, as was a number of pages that detailed the current financial situation of the district Co-op, which includes a sizable hole in debt, limited and aged assets and declining sales numbers, particularly after the Covid-19 pandemic that did a number on many retail systems.
The bottom line - the Macrorie & District Co-op isn't bringing in enough cash to cover its expenses, forcing the Board of Directors to bring a difficult topic to the members.
Alex Evans, one of the directors of the Co-op board chaired the meeting and was joined by Cory Leichert, representing Federated Cooperatives Limited, who provided background information behind the move and answered questions that members in attendance presented.
"As a GM and a member of a lot of different Co-ops, I've seen services reduced, I've seen some Co-ops close, and it's unfortunate, but sometimes the reality is that it's not even Co-ops; it's just businesses that do close, and some businesses are just not sustainable," said Leichert. "So, why dissolution? It's a voluntary dissolution where it's brought forth to the membership. It's better than a bankruptcy because you can have some control about where the funds are and you can control the direction a bit more, which is more beneficial to the members, rather than putting it to a third party, in my opinion."
Cory noted that one of the reasons why a business may want to move into dissolution include a loss of profits, essentially forcing operators to have to make these tough decisions, but maintaining a level of control so that the benefits of members can also be retained.
Going over the financials of the business model, Leichert highlighted some projections that showed people the downward trend of which the district Co-op has been consistently moving.
"It's looking like a negative trend line," he said. "From $509,000, and if we move this out from 2025 to 2029, and if things stay the same, sales stay the same, margins stay at that 11.5%, and expenses continue that trend line going, it's going to be around that half a million plus dollars each year of a loss in operations."
The cash flows are also projected to be further eroded if this model continues into the immediate future.
It was also said that even if the two Co-op stores in both Macrorie and Conquest made reductions in both staff and services, it wouldn't make much of a difference due to the low volume that's currently 小蓝视频 produced.
"Even with some significant projected improvements that may not be attainable, there's still looking like there's a local loss moving forward," said Leichert.
Further challenges facing the stores include a need to upgrade its fuel storage facilities, as well as the steel underground tanks, which are said to be over 40 years old. With the decline in sales and cash flow, this makes it next to impossible for the Co-op to replace or repair such assets.
Partnerships or possible amalgamations with other locations, such as the nearby Riverbend Co-op that serves the communities of Outlook, Kenaston, Davidson, Wiseton and Beechy, are said to essentially be off the table with the current financial state of the Macrorie and district system.
Such discussions with the neighboring Co-op system showed that with the current financial picture, Riverbend had no interest in "buying into our burdens", explained Evans.
"With limited and aged assets, as well as large debt, partnering with a surrounding Co-op would be unlikely, in our opinion," said Leichert.
Questions from the room included why such information on the state of the local Co-ops was "only 小蓝视频 presented to us now", which Evans said was very much not the case, as yearly AGM meetings have provided such reports of numbers and highlights that have routinely been publicly available; the only difference 小蓝视频 that now, the Board felt that their backs were against the wall and that a decision had to be made on the future immediately.
It was said that the best option to preserve membership equity in the Co-op system was through dissolution to avoid running the risk of impacting those benefits to members. A legal and financial process would be carried out in dissolving the Co-op, but there is limited information right now on when cheques would be mailed out to members.
The ever-changing way in which people get their products in this day and age was definitely a critical hit to the two local Co-ops, with Amazon 小蓝视频 a swift and easy way for people to get their goods, and there isn't a feasible way to expect that to change anytime soon.
"It's not just the Co-op system, right?" said Evans. "We've had institutions such as Hudson's Bay, which built this country, just go out of business. Peavey Mart, which was around for decades, and they've been put out of business. Retail in Canada is struggling, no matter where it is, and Co-op is just a small symptom of this larger problem."
At the conclusion of the meeting, members placed their desired 'X' on their ballots and cast their votes. The end result saw a vote of 'Yes' in dissolving the Macrorie & District Co-operative Association, with a voter result of 87 to 27.
At this point, the Association has appointed a liquidator who will assume the responsibility of carrying out the process. In addition, it was revealed that the Board of Directors will distribute any unallocated surplus dollars and non-statutory reserves to the Conquest and Macrorie fire departments.
Evans thanked everyone in attendance for coming out to discuss and decide on this monumental decision that affects two community areas, giving special mention to the local Co-op staff members who worked hard for many years.
