The closure of Peavey Mart stores ends a 119-year-old family relationship with Canadian agriculture.
Frank Peavey and his son-in-law built the first family elevator at Winnipeg in 1906 and grew the company to 100 grain elevators by the time they sold to Cargill in 1975.
The family had opened National Farmway Stores in 1967 in Dawson Creek, B.C. and expanded them.
When Con-Agra bought the stores in 1982 they were set for closure due to underperformance.
The 1970s were tough on farming, with low commodity prices and rising input costs. The decade started with 130,000 farms in Saskatchewan, ending with 79,000.
A group of investors bought the chain in 1984 and moved headquarters to Red Deer, Alta., creating a Canadian-owned company.
Over the years Peavey served farming, ranching and country lifestyles from the 20 per cent interest rates in the 1980s to better times and even fewer farms (about 29,000 in Saskatchewan now).
Stores ranged in size from 10,000 square feet to 40,000, with 11 in Saskatchewan.
The chain almost doubled in size in 2016 when Peavey Mart bought the TSC chain of Ontario, Manitoba and Nova Scotia.
TSC had a checkered history, started by U.S.-based Tractor Supply Limited, but sold and called TSC when the stores didn’t make enough profit.
In 2022 Peavey Mart opened a 40,000 square foot store in Red Deer headquarters. Cost would have been more than $8 million — a large investment for the chain.
In 2020 Peavey Mart expanded two stores and built three new units.
Then the COVID-19 pandemic lockdown virtually shut the business for nearly two years.
Documents filed in Alberta Court of King’s Bench at Calgary by FTI Consulting indicate lingering post-COVID-19 effects, reduced consumer demand and interest rates caused filing for protection under the Company Creditors Arrangement Act (CCAA).
In loan default with RBC since 2023, Peavey arranged financing with Boston-based 103 Partners — an investment pool specializing in funding companies with financial difficulties.
In December last year, 103 Partners agreed to lend Peavey Mart up to $105 million revolving credit and a $30 million term loan.
In January, 103 Partners called in the $66.5 million advance. Peavey Mart, also owing $60 million to 820 suppliers, filed for CCAA protection.
In the first five weeks of the close-out Peavey Mart paid down the 103 Partners debt to $25 million from $65 million.
CCAA protection gives the company time to restructure or sell what’s left of the business.
Unless a buyer is found for the real estate 103 Partners can acquire 94 stores and two distribution warehouses for the $25 million left owing on the loan.
That’s a pretty low price for more than $100 million worth of real estate.
No wonder these investment pools have been called vulture funds.
When Peavey Mart came to Moose Jaw the Co-op manager was asked how this store would affect the Co-op Agro-centre.
“It’s good for us,’’ he replied. “The farmers will have two places to compare. They won’t drive straight to Regina.’’
Moose Jaw has lost a key piece of the retail sector.
Ron Walter can be reached at [email protected]
