Canada’s independent speciality toy and children’s books retailer Mastermind GP and Mastermind LP (Mastermind Toys) filed and obtained an initial order for creditors’ protection on 23 November 2023.
The retailer sought protection under the Companies’ Creditors Arrangement Act (CCAA) from the Ontario Superior Court of Justice (Commercial List) in Toronto.
The network of 66 Mastermind Toys stores will continue to operate during the process.
The retailer’s existing sales and holiday promotions, including its Black Fri-Play event, will also remain applicable in stores and online.
Mastermind Toys stated in a press release: “The difficult but necessary decision to seek creditor protection under the CCAA was made following careful evaluation of available alternatives and in consultation with legal and financial advisors.
“Over the past several years, Mastermind Toys has faced a range of challenges including increasing competition, disruptions from the Covid-19 pandemic and more recently a deteriorating macro-economic environment.
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“Despite implementing a series of operational improvements and cost reductions and undertaking an extensive strategic review and conducting a robust sale process, the challenges facing the company’s business have become too significant to overcome.”
Mastermind Toys will seek the court’s authorisation to initiate the closure of an initial group of stores, then explore strategic alternatives for the remainder.
At a hearing scheduled for 30 November 2023, Mastermind Toys intends to seek additional relief from the court.
Accounting company Alvarez & Marsal Canada has been appointed to monitor the CCAA.