The last decade has not been kind to toy retailers — big and small — with many stores shuttered in the face of online and big-box competitors.
Mastermind Toys was almost one of them.
After filing for creditor protection more than two years ago, the company was pulled back from the brink, with CEO John Bayliss — hired last May — now doubling down on what makes the Canadian brand unique.
“We’re focused on the things that algorithms can’t replace,” says Bayliss. “People, expertise and local connections. That’s our greatest strength.”
Founded in Toronto in 1984 as an educational computer store by brothers Andy and Jon Levy, Mastermind pivoted into toys, and established a reputation for its exclusive items, free gift-wrapping services and knowledgeable staff, known as “Play Experts,” who help curate customers’ shopping.
After the in-store experience was suspended due to the pandemic, the brand succumbed to competition from major online and big-box competitors, filing for creditor protection in November, 2023.
That December, Mastermind was acquired by Unity Acquisitions Inc., a company owned by Canadian retail giants Joe Mimran, Frank Rocchetti and David Lui, who took its store count from 66 to 47 and installed Bayliss as CEO.
In the nine-months since, the brand has opened two new locations, acquired Quebec-based toymaker Coco Village, inked partnerships with 7-Eleven, Holt Renfrew and DoorDash, and announced a new franchising strategy.
“My mandate was to rebuild the brand and get Mastermind back on a growth trajectory by taking advantage of a space in the market — specialty retail — that has purpose, that serves communities and Canadian families in a way that you’re not going to see with big box retailers,” says Bayliss, who spent the previous nine years at Walmart Canada.
The Bolton, Ont., native first became interested in retail as a teen working as a grocery store clerk to save for his education.
After graduating from Western University’s Ivey Business School in 1999, Bayliss went to work for the Boston Consulting Group where he remained until 2015, minus two years spent earning a Harvard MBA and a summer working for General Mills.
Then one of his consulting clients, Walmart, offered Bayliss a job, where he stayed for nine years until getting the call from Mastermind’s new owners.
Now, Bayliss is working on saving the brand he says was part of his kids’ childhoods by focusing on the things its competitors can’t offer, while seeking more sustainable growth.
The Star recently caught up with Bayliss from Mastermind’s head office in Scarborough to talk about that turnaround effort, how he’s planning to grow the business and his best advice for finding the perfect toy for any child.
How did you get into retail?
My first job was as a stock clerk in a grocery store in Bolton, which I did to save up for university.
I learned a lot in those years about serving customers, operations, merchandising discipline, building displays and efficient operations in a franchise business. A lot of what I learned there I reflect on now.
After University I worked for about 16 years for Boston Consulting Group, and a good chunk of that time was focused on retail. One of my clients was Walmart, and a little over a decade ago they called me into the office, and I thought they were going to have a discussion with me around our engagement but instead they asked me to join them.
Why did you leave consulting?
I always wanted to get involved on the operations side, and there was no better place to do it.
Around that time we were making choices around using the internet to run sales, and the role of stores in the internet age. I was at the helm of the supply chain during the early days of the pandemic, so I got a crash course in strong operational discipline and leadership.
Then about a year and a half ago I left Walmart and reconnected with an old client, who was one of the new owners of Mastermind Toys, and who asked if I could help them rebuild a phenomenal Canadian brand.
Originally, they just wanted help getting ready for the next phase of growth, given my retail operations background, and that turned into an opportunity to join as a CEO.
What interested you in the opportunity?
My wife and I have 12-year-old twins and Mastermind was a big part of our household.
I remember going there on Saturday mornings before their friends’ birthday parties, telling the Play Expert we needed a gift for an eight-year-old that loves dinosaurs, and having them go through recommendations, making suggestions and then gift-wrapping it.
It was convenient, it was easy, and we knew when we showed up to that party with a Mastermind bag it signalled a certain level of quality.
The Mastermind Wish Book was also required reading in our household; the kids would tear it apart. So, the opportunity to help rebuild a great Canadian brand with such deep memories for my family and so many others was hard to turn down.
My daughter has this beloved stuffed toy named “Fudge,” and the night I sat down with my family to say, “dad’s going to join Mastermind,” my daughter got up from the dinner table, ran to her room, and came back carrying Fudge.
She said “Dad, that’s Fudge’s home!” because of course, it was a unique toy made by Mastermind and had the logo on the tag.
Knowing how special Fudge is to my daughter and seeing how excited she was showed the power and magic we help create for families.
What is your mandate as CEO?
I was brought on to do three things.
One is to bring operational discipline. That means bringing on board new stores — like our new flagship in Montreal — and renovating and upgrading existing stores. That also includes building out our recently announced franchising model.
Second was to double down on the things that make us unique. That includes strengthening our exclusive brand business through acquisitions like the one we recently completed with a great Canadian company Coco Village. Our goal is to have one third of our assortment exclusive or private label.
And finally, it’s looking at how we can upgrade the online experience. For example, how can we share our Play Experts’ voice in a digital way?
That also includes getting our stores ready to be used as a shipping point, which we launched this year, so we can ship from store rather than just the warehouse. We also entered a partnership with DoorDash to offer same-day delivery.
Why did Mastermind file for creditor protection in 2023?
It’s hard for me to say where it went wrong, because I wasn’t there.
We’re focused on winning back customers and building our customer base, and what’s going to make us successful is having that unique Mastermind magic, which you won’t find at other retailers.
Are you suggesting the brand lost that focus?
The company went through a period of rapid expansion, and I think when you expand it’s important to stay true to who you are, especially as a specialty toy retailer, which for us is about helping kids learn through play.
If you become too focused on items you can find at any mass retailer you lose your point of differentiation, and what makes the brand special.
How is your growth plan different?
We’re focused on the things that algorithms can’t replace: people, expertise and local connections. That’s our greatest strength.
We’re being very thoughtful around curation, for example. We’re working towards having a third of our products be items that are unique to us, and another third specialty brands focused on education — higher quality brands that you won’t necessarily find at a mass toy store. That’s very important for us.
And then a third will be the big-name toy brands you expect at any toy store, like Lego and Hot Wheels, which we will always carry but have a clear role in our assortment, especially around the holidays.
Our most successful locations have been there for many years; they are members of that community. They’re hosting events, whether it’s Lego build nights, puzzle events, STEM activities, book readings, they’re part of the fabric of the community.
One of the reasons we launched our franchise program before the holiday seasons is because we want local owner operators that are members of the community.
You also won’t see a 10,000 square foot Mastermind store. We’re very intentional about the communities we’re in, and we try to maintain a smaller community-based store, which is true to our DNA.
What is the current state of the business?
Before the restructuring we were at 66 stores, and after we were down to 47. Now we have 49, with two new stores in Quebec, and we’re in every region from the Maritimes to the West Coast. We have seen double digit sales growth this year, and we’ve seen profitability growing faster than sales, which is great.
What’s your advice for finding the perfect children’s gift?
Toys are such a unique and individual choice for every child — one’s favourite toy may not be of any interest to another — so it’s important to understand their interests.
Do they love animals? Science? Space? Vehicles? Sports? Understanding what really gets them engaged and excited as they’re playing is the first step. Then it’s about how they play. Do they love running around outdoors? Would they rather sit at a table or on the floor?
You want to find the thing they’re talking about around the dinner table and want to learn more about.
If you can tap into that interest, it’s a great opportunity to enrich that learning through toys, books or other educational tools you can find in our stores; things that will make them want to put down their screens and engage their imagination.
