Canada’s largest specialty toy chain is looking to close some of its 66 stores as it contends with a “deteriorating macro-economic environment.”
The Toronto-based Mastermind Toys announced Friday it was entering creditor protection.
“The difficult but necessary decision to seek creditor protection under the (Companies’ Creditors Arrangement Act) was made following careful evaluation of available alternatives and in consultation with legal and financial advisors,” the company said in a statement. “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.”
The company said all of its stores would remain open through the holiday season, along with its online retail options.
The Companies’ Creditors Arrangement Act, or CCAA, is a federal law providing a path for corporations facing financial difficulties to restructure as a way of avoiding bankruptcy proceedings. Mastermind Toys must seek permission from a court.
Mastermind Toys said it implemented a “series of operational improvements and cost reductions” and attempted to find a buyer before going the creditor protection route.
“The challenges facing the company’s business have become too significant to overcome,” the statement said.
Mastermind Toys prides itself on “supporting kids, parents, grandparents, educators and gift givers by offering a curation of toys and books that help with the development of a child’s mind, body and expression.”
Earlier this month, another Canadian retailer, Bad Boy Furniture, filed a bankruptcy and insolvency proposal and began liquidation sales.
