Toronto-based Mastermind Toys continues with its aggressive Canadian expansion and last month, it opened its 40th Canadian location. We spoke with company president Humphrey Kadaner to learn more.
Mr. Kadaner explained Matermind's unique real estate strategy, which differs from that of many competitors. Mastermind seeks retail space with exceptional vehicle visibility, ideally in high-traffic areas. As a result, it prefers free-standing retail space or locations in strip plazas, as opposed to locations within shopping centres. Mastermind studies demographics for its site selection, seeking locations in highly-educated, child-populated areas with higher-than-average discretionary income and toy spending. Parking is a necessity and Mastermind has found success locating near good grocery stores. Currently, Mastermind looks to operate stores in the 5,000 square foot range.
Mr. Kadaner revealed that Mastermind will open 10 or 11 locations this year, with six of those located in Alberta. Its first Grande Prairie, AB location was recently announced, and Mastermind will open three more Edmonton locations as well as one in Calgary. Mastermind will open its first location in Manitoba this year, as well, and will open three more locations in Ontario.
Longer-term, Mr. Kadaner says that Mastermind is looking to open stores in Saskatchewan, as well as expand operations in the Maritimes.
By the end of October, Mastermind will have three stores in British Columbia, 10 stores in Alberta, one store in Manitoba, and 32 stores across Ontario. That will bring its store count to 46, with over 800 employees. This steady expansion represents a four-fold growth over the past four years, with plans to grow to 75 stores by 2018.
Mr. Kadaner explained how the time is right for Mastermind to expand. Over the past 18 months, about 40 toy stores have closed in Canada. Mastermind is unique and differentiated from many of these in how it focuses on toys with an educational component. As a result, it has resonated well with parents seeking to provide their children with 'non-screen time' learning experiences. Furthermore, Mastermind's product changeover is roughly 30% to 35% each year, meaning there are always new things to experience in store.
The company was founded in Toronto 1984 by brothers Andy and Jon Levy, who wanted to offer shoppers a classic toy store experience. Its first location measured only 300 square feet, and sold children's software and home computers. Co-founder Jon Levy says that his store's curated collection of toys and books differentiates it from mass-market retailers, while offering a greater selection than in independent shops. It carries over 10,000 educational toys, books, games, arts and crafts, puzzles and science kits. The Levy brothers partnered with Birch Hill Equity Partners in 2010, facilitating the company’s national expansion.