Mastermind Toys customers warned to use gift cards by Dec. 24 as company is set to change hands

Mastermind Toys shoppers have less than a week to redeem store gift cards. 

The Canadian toy retailer announced earlier this month that it had signed an asset purchase agreement with Unity Acquisitions Inc. 

Mastermind filed for creditor protection under the Companies' Creditors Arrangement Act (CCCA) on Nov 24.

Customers are now being told their gift cards will not be honoured at the company's 66 locations past Christmas Eve.

"Gift cards will not be accepted after December 24 for the remainder of the CCAA (Companies' Creditors Arrangement Act) process, until the acquisition of Mastermind by Unity Acquisitions Inc. closes," company spokesperson David Ryan said in an email to CBC News.

Ryan said this information is being communicated to customers in-store.

On Wednesday, a sign taped to the door of Mastermind Toys in Coquitlam, B.C., announced gift cards will only be accepted until the end of business on Dec. 24.

Ryan said he could not confirm if gift cards would be accepted again once the deal with Unity Acquisitions has closed, which is expected to happen in January.

Mastermind is owned by Birch Hill Equity Partners Management Inc. and has been facing increasing competition, disruptions from the COVID-19 pandemic and more recently, a deteriorating economy that has customers spending less.

The Canadian toy retailer filed for creditor protection on Black Friday, a sales period that is typically a boon for retailers.

An Ontario court granted Mastermind permission to liquidate stores.

The Toronto-based toy retailer says it would close 18 of its 66 stores: nine locations in Ontario, four in Alberta, two in New Brunswick and one each in B.C., Nova Scotia and Manitoba. 

The full store closure list is here.

Unity Acquisitions Inc. is run by Joe Mimran, Frank Rocchetti and David Lui.

Mimran is best known for founding Club Monaco, creating the Joe Fresh brand for grocer Loblaw Companies Ltd., and in more recent years, helping revive hat business Tilley Endurables Inc. with Rocchetti.

Meanwhile, Lui has spent time at Canadian Tire Corp. Ltd.'s brands Sport Chek and Mark's, and is chief executive of clothing retailer Kit and Ace, which the trio also own. The group also owns Casca Footwear, a premium shoe company from Vancouver.

Mastermind and Unity did not disclose the financial terms of their deal.

The deal includes the majority of Mastermind Toys store locations and will allow a "significant'' portion of the company's 800 employees to continue with the business.

According to a release, Mastermind Toys is the country's largest specialty toy and children's book retailer and has been in business since 1984.