Mastermind GP and Mastermind LP, which operates specialty toy and children’s book retailer Mastermind Toys in Canada, has sought and obtained an Initial Order for creditor protection under the Companies’ Creditors Arrangement Act (CCAA) from the Ontario Superior Court of Justice (Commercial List) in Toronto.
All 66 Mastermind Toys stores across Canada remain open for business and all the current sales and holiday promotions (including the Black Fri-Play event) will continue, in stores and online.
The retailer says that the decision was “difficult but necessary,” and made after “careful evaluation of available alternatives and in consultation with legal and financial advisors.” Mastermind cites challenges in recent years from increasing competition, disruptions from the COVID-19 pandemic, and a “deteriorating macro-economic environment.”
Mastermind implemented a series of operational improvements and cost reductions, underwent an extensive strategic review, and conducted a robust sale process. But the challenges “have become too significant to overcome.”
During the CCAA proceedings, Mastermind Toys 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 the store locations. Mastermind Toys expects to seek additional relief from the court at a comeback hearing on November 30, 2023.
Alvarez & Marsal Canada Inc. was appointed as the CCAA Monitor. Additional information related to the CCAA proceedings will be available on the Monitor’s case website at www.alvarezandmarsal.com/Mastermind.
The company’s website notes that it is not accepting returns or exchanges on any merchandise, and due to high volumes, gift wrapping, a standout feature that set the retailer apart, is not available either.