Alberta farmers’ co-operative UFA is set to get out of an “increasingly competitive” space in the retail sector by closing its outdoor supply chain Wholesale Sports.
The co-operative, which bought what was then a seven-store chain in 2008, announced Thursday it would start inventory liquidation sales Friday at all 12 of its remaining Wholesale Sports locations in the four western provinces.
“This was an all-inclusive business decision that, while difficult, was made in the best interest of UFA on behalf of our members,” UFA CEO Carol Kitchen said in a release.
The farmer co-operative, which dates back to 1909, today deals in crop inputs and seed, livestock feed, drugs and supplies, farm equipment, bins, farm building construction, construction materials and bulk fuel.
UFA emphasized the parent co-operative is “still showing strong financial results” and the wind-down of Wholesale Sports is “a strategic business decision” following an “extensive review process… which included evaluating numerous options for the Wholesale Sports business.”
“There were numerous external factors that led to this decision including an increasingly competitive environment, the continued shift to online purchases and an overall slowing of consumer discretionary spending as a whole, including the outdoor industry,” Kitchen said Thursday.
The Wholesale Sports chain bills itself as the “largest multi-channel outdoor retailer in Western Canada dedicated to the outdoors,” dealing in hunting, fishing and camping gear and clothing. It includes two stores in Edmonton and one each in Saskatoon, Winnipeg, Calgary, Grande Prairie, Lethbridge, Prince George, Kamloops, Nanaimo, Langley and Westbank, B.C.
Wholesale Sports in 2016 booked a nine per cent drop in sales, to $102.7 million, and contributed about $900,000 to UFA’s EBITDA (earnings before interest, taxes, depreciation and amortization) for the fiscal year.
The chain last year noted a “very challenging economic and competitive environment,” with reduced consumer spending on “high-ticket purchases” such as guns, archery and optics across the network, though its e-commerce business showed “positive growth” of 21 per cent.
That said, the chain in 2016 also sought to “manage and control expenses” through various means, including the closing of its Regina store at the end of the year.
The chain had also invested in U.S. expansion in 2009, buying 13 stores in the Pacific Northwest, but UFA sold off that part of the business in 2013.
The wind-down of Wholesale Sports, Kitchen said Thursday, “will allow UFA to focus on its core business of agriculture and petroleum.”
The liquidation sales, to be managed by asset management firm Gordon Bros., will run until Dec. 28 or until the stores are cleared of inventory. Pending online sales will be completed, but the chain stopped accepting new online purchases effective Thursday afternoon. — AGCanada.com Network