Canadian retail toy store chain Mastermind has filed for bankruptcy protection from its creditors in an Ontario court, citing mounting financial problems.
The Toronto-based privately held company is owned by Birch Hill Equity Partners Management. It said the bankruptcy filing was the result of increasing competition and pandemic disruptions.
“The challenges facing the company's business have become too significant to overcome,” said Birch Hill in a news release.
The bankruptcy filing will enable Mastermind to restructure its operations in hopes of helping the business overcome its financial issues and recover, though that outcome is not guaranteed.
Mastermind said all 66 of its stores across Canada will remain open for the time being and holiday promotions, including its Black Friday and Cyber Monday sales, will continue.
However, the retailer is looking to close an unspecified number of underperforming stores across the country.
Mastermind currently owes $22.2 million to various creditors. It also has $5.6 million in outstanding gift card liabilities.
The debts come as Mastermind said its same store sales have declined 22% from a year ago.
Founded in 1984, Mastermind was put up for sale in April of this year though no buyer has emerged for the company.
Mastermind is not a publicly traded company.
