Montreal-based tea retailer closing 124 stores
July 14, 2020, Montreal, Que. – DAVIDsTEA Inc. is sending notices to terminate leases for 82 of its stores in Canada and all 42 of its stores in the United States. The lease terminations will take effect in 30 days.
The Montreal-based company announced that the actions were necessary in order to pursue its restructuring plan.
“With the upcoming closure of 124 unprofitable stores across North America, we are certainly making good progress in creating a stronger business model for the future and ensuring the long-term success and sustainability of DAVIDsTEA and our beloved brand,” Herschel Segal, founder, chairman and interim CEO of the company, stated in a press release.
“Today, we are moving forward with the closure of a significant number of money-losing stores,” said Frank Zitella, CFO and COO of DAVIDsTEA. “With all our stores closed in the U.S., we will focus exclusively on our very successful e-commerce sales which had a penetration rate of close to 43 per cent in this market prior to COVID-19.
“With regards to our brick and mortar network in Canada, negotiations with landlords for our remaining 100 stores have started and, at this time, the outcome of these discussions remains uncertain. To the extent we can not reach agreements with the landlords on more favourable lease terms, we may terminate the leases and permanently close additional stores. However, we are fully committed to continuing to serve our loyal tea-loving customers with passion and ensuring that their favourite blends of tea are available online and in grocery stores and pharmacies, both during and after this restructuring process.”
All 100 remaining DAVIDsTEA stores have been closed since March 17, 2020 due to the COVID-19 pandemic, and will remain so until further notice.
DAVIDsTEA’s objective is to create a leaner and more efficient company and to accelerate its transition to an online retailer and wholesaler of high-quality tea and accessories, better positioning the company for long-term growth.
DAVIDsTEA is a leading online retailer and mass wholesaler of specialty tea, offering a differentiated selection of proprietary loose-leaf teas, pre-packaged teas, tea sachets and tea-related gifts and accessories.