Although stores currently remain open for business, Mastermind Toys intends to close a number of them, while it explores the future of its retail estate.
Mastermind Toys has announced that it has sought and obtained an initial order for creditor protection under the Companies’ Creditors Arrangement Act (the CCAA) from the Ontario Superior Court of Justice (Commercial List) in Toronto.
At the moment, all 66 Mastermind Toys stores across Canada remain open for business and all current sales and holiday promotions are expected to continue in stores and online.
The decision to seek creditor protection under the CCAA was described by the company as “difficult but necessary” and made following careful evaluation of available alternatives and in consultation with legal and financial advisors.
Over the past few years, Mastermind Toys has faced a range of challenges including increasing competition, disruption from the Covid-19 pandemic and more recently a deteriorating macro-economic environment. Despite implementing a series of operational improvements and cost reductions, and undertaking an extensive strategic review and conducting a robust sale process, Mastermind Toys now says the challenges facing the business have become too significant to overcome.
The company intends to seek the Court’s authorization to commence a store closure process for an initial group of stores, while it explores certain strategic alternatives for the remainder of them. Mastermind Toys expects to seek additional relief from the Court at further hearing on 30th November.
Alvarez & Marsal Canada Inc. was appointed as the CCAA Monitor. Additional information related to the CCAA proceedings will be available at www.alvarezandmarsal.com/Mastermind.
Mastermind Toys is Canada’s largest specialty toy and children’s book retailer, with 66 stores and a website. It has a 39-year heritage and a stated purpose to inspire generations of lifelong learners through the power of play.