(Toronto) Troubled toy retailer Mastermind GP says it has reached an agreement to sell the bulk of its business to a company representing three big names in Canada’s retail world.
The Toronto-based retail chain announced Monday that it had signed an asset purchase agreement with Unity Acquisitions, a company led by Joe Mimran, Frank Rocchetti and David Lui.
Mastermind and Unity did not disclose the financial terms of their deal, which is still subject to court approval but is expected to close in January.
The deal includes the majority of Mastermind Toys stores and will allow a “significant” portion of the company’s 800 employees to continue working.
“This acquisition is part of Unity’s strategy to enhance and grow extraordinary Canadian brands,” Joe Mimran said in a statement.
“We are excited to have the opportunity to work with the Mastermind Toys team and take the brand and company to the next level.”
Mr. Mimran is best known for founding Club Monaco, creating the Joe Fresh brand for grocer Loblaw and, most recently, helping to revive the Tilley Endurables hat company with Mr. Rocchetti.
Meanwhile, Mr. Lui spent time at Canadian Tire and is general manager of clothing retailer Kit and Ace, which the trio also own. The group also owns Casca Footwear, a high-end footwear company in Vancouver.
Mastermind, which is owned by Birch Hill Equity Partners Management, is facing increased competition, disruption from the COVID-19 pandemic and, more recently, a deteriorating economy that is prompting clients to spend less.
These factors were so severe that Mastermind tried to sell its business and last month filed for protection under the Companies’ Creditors Arrangement Act.
Last week, the brand began announcing to its customers the closure of 18 of its 66 stores.
The stores closing include nine locations in Ontario, four in Alberta, two in New Brunswick, one in British Columbia, one in Nova Scotia and one in Manitoba.
An Ontario court allowed Mastermind to liquidate the stores last week, specifying that sales must be completed by February 29.
Despite the closure of some stores, Mastermind says its holiday sales and promotions will continue. The company has also implemented an extended return and exchange policy for purchases made online and in-store, with the exception of 18 stores that are conducting clearance sales.
Mastermind’s history dates back to 1984, when brothers Andy and Jon Levy opened an educational software store in Toronto. Its popularity convinced the brothers to turn it into a chain and expand its product assortment.
In the 2000s, they rebranded the company, focusing on educational toys rather than software, and renamed the chain Mastermind Toys.
