Mastermind Toys has implemented significant workforce changes, laying off approximately 272 employees in conjunction with its transition to new ownership. According to documents filed with an Ontario court this month, the toy retailer has issued termination notices to 232 employees who will not be retained by the new owner, Unity Acquisitions Inc. An additional 40 temporary employees will also not be retained, as revealed in filings from Alvarez & Marsal Canada Inc., representing Mastermind Toys.

This development follows the recent announcement of the completion of the sale of Mastermind Toys to Unity, an acquisition led by retail luminaries David Lui, Joe Mimran, and Frank Rocchetti, who also own brands such as Kit and Ace and Casca Footwear. Joe Mimran, Unity’s chairman and renowned for his role in founding Club Monaco, creating Joe Fresh, and revitalizing Tilley Endurables Inc., expressed his enthusiasm for the deal’s closure.

How Many Employees Have Been Affected, and What Opportunities Exist?

In a press release, Mimran stated, “We look forward to continuing to provide leading toys, books, and new unique products that ignite imagination and play. We are excited about the future of Mastermind Toys and bringing new ideas and an enhanced in-store and online experience to build on the company’s strong fundamentals and unlock growth.”

Out of the total Mastermind workforce, 619 employees have been extended new employment offers. According to court filings, these offers were presented before the deal’s closing date, and if accepted, the employees would transition to become part of Mastermind Toys Inc. when the deal concluded.

Before entering into talks with Unity, Mastermind had approximately 800 employees. The decision to file for creditor protection in November was attributed to various challenges, including heightened competition, disruptions caused by the COVID-19 pandemic, and a recent economic downturn leading to decreased customer spending.

While the financial terms of the Mastermind-Unity deal were not disclosed, the agreement, announced in early December, coincided with Mastermind’s announcement of the liquidation of 18 out of its 66 stores. These store closures spanned nine locations in Ontario, four in Alberta, two in New Brunswick, and one each in British Columbia, Nova Scotia, and Manitoba.

Severance Entitlement for Mastermind’s Employees

In the Canadian context, non-unionized employees and executives at Mastermind possess the entitlement to receive comprehensive severance pay in situations of job loss arising from downsizing or corporate restructuring. The quantum of severance pay is contingent upon several factors and has the potential to reach up to 24 months’ worth of compensation.

At Whitten & Lublin, we recognize the challenges associated with job loss or termination, and our seasoned employment lawyers are available to assist in navigating legal options. Our goal is to ensure individuals receive the compensation they are entitled to. We encourage anyone affected by recent layoffs in Canada to reach out for a consultation, either online or by phone at (416) 640 -2667, to discuss their situation today.