Mastermind Toys in expansion mode
Despite the Toys “R” Us bankruptcy filing, Canadian toy firm eyes opening stores across Canada
TORONTO — Jon Levy’s favourite playthings as a Toronto child growing up in the 1960s and 1970s included Lego blocks and fort-building kits — classics that still fly off the shelves of his Mastermind Toy stores today.
“My true innovation in this business is being able to get inside my inner kid and determine whether it is something truly fun to play with,” said Levy, the chain’s co-founder and CEO.
“Being able to explore that as an adult every day is quite an amazing occupation. And 90 per cent of the things I look at and interact with weren’t around when I was a kid.”
Indeed, much about the toy retail landscape has changed since Levy and brother Andy co-founded Mastermind Toys back in 1984.
The latest evidence is the bankruptcy filing this week of big-box chain Toys “R” Us, and parallel proceedings by its Canadian subsidiary. It’s the latest bricks-andmortar retailer to struggle amid the rise of e-commerce and changing consumer preferences.
And yet, Mastermind Toys is expanding its footprint across the country at the fastest pace in its history — aiming to grow from 56 stores to 60 by the end of the year, and 90 by the end of 2020.
After the current expansion initiative, the retailer will hone in on Quebec, where it has identified 18 to 20 potential stores.
The chain’s focus on educational and specialty offerings that are harder to find at its bigger competitors — including Walmart, Amazon and Toys “R” US — has created a devoted following of Canadian parents.
Mastermind Toys started with a 300-square foot Toronto store focused on children’s educational software, but it hasn’t been a mom-and-pop shop for some time. In 2010, after 25 years as a wholly family-owned business, Birch Hill Private Equity made an undisclosed investment in Mastermind Toys. It’s now a majority stakeholder, said Levy, who along with his brother remain “substantially invested.”
Birch Hill typically makes investments on a 10-year timeline, company president Humphrey Kadaner said, and its current plans with the private-equity firm take it through to 2020.
Kadaner shrugs off the increased competition from the likes of online behemoth Amazon.
Next year, Mastermind Toys aims to offer a so-called click-and-collect option for shoppers who want to order on the website and pick it up at the store — a service, Kadaner argues, that gives a physical retailer an advantage over a digital one such as Amazon for those who “don’t want products sitting on their front step.”
Levy says Mastermind Toys isn’t trying to compete on price with the likes of Amazon, but rather on “experience.”