DAVIDsTEA Provides Business Update
30 July 2020 - 10:30PM
DAVIDsTEA Inc. (Nasdaq:DTEA) (“DAVIDsTEA” or the “Company”), a
leading tea merchant in North America, announces that as part
of its restructuring plan under the Companies’ Creditors
Arrangement Act (Canada) (“CCAA”), it plans to reopen 18 stores in
Canada under new, more favourable lease terms and conditions.
“We believe that a select group of our
best-performing stores, complementing our growing online and
wholesale business model and supported by an entrepreneurial
organization, will enhance DAVIDsTEA’s ability to emerge from the
CCAA restructuring process as a more sustainable and resilient
organization,” stated Herschel Segal, Founder, Chairman and
Interim CEO of DAVIDsTEA. “Today, our customers and stakeholders
have a better picture of what DAVIDsTEA will look like in the near
future. Our decision to reopen these select stores is consistent
with our objective to create a leaner, more efficient company,
positioned for long-term growth,” added Mr. Segal.
“COVID-19 and the CCAA restructuring have led to
the execution of our business plan at an exponential pace. The plan
was always to significantly reduce our retail footprint and the
strong performance of our e-commerce and wholesales channels in
recent months has provided further validation of that strategy,”
said Frank Zitella, CFO and COO of DAVIDsTEA. “We are very
pleased that the landlords for these 18 stores have offered more
advantageous rent conditions to us in light of the COVID-19
pandemic,” added Mr. Zitella.
DAVIDsTEA expects to reopen the 18 stores by the
end of August 2020, conditional upon entering into amended leases
for the stores. The 18 DAVIDsTEA stores to be reopened are all
located in major shopping malls. Seven of the stores are in Québec,
five are in Ontario, with the balance in Alberta, British Columbia,
Manitoba and New Brunswick. The proposed new lease terms are
expected to give DAVIDsTEA termination rights at the end of 2020,
and the flexibility of an option to extend the leases. The Company
is sending notices to terminate leases for its other 82 stores,
which terminations will take effect in 30 days.
The Company will continue to provide updates
throughout the CCAA restructuring process as events warrant.
Cautionary Forward-Looking
Statements
This press release includes statements that
express our opinions, expectations, beliefs, plans or assumptions
regarding future events or future results and there are, or may be
deemed to be, “forward-looking statements” within the meaning of
the Private Securities Litigation Reform Act of 1995 (the “Act”).
The following cautionary statements are being made pursuant to the
provisions of the Act and with the intention of obtaining the
benefits of the “safe harbor” provisions of the Act. These
forward-looking statements can generally be identified by the use
of forward-looking terminology, including the terms “believes”,
“expects”, “may”, “will”, “should”, “approximately”, “intends”,
“plans”, “estimates” or “anticipates” or, in each case, their
negatives or other variations or comparable terminology. These
forward-looking statements include all matters that are not
historical facts and include statements regarding our intentions,
beliefs or current expectations concerning, among other things, our
Restructuring Plan, the COVID-19 pandemic, our strategy of
transitioning to e-commerce and wholesale sales, future sales
through our e-commerce and wholesale channels, the closing of
certain of our retail stores, future lease liabilities, our results
of operations, financial condition, liquidity and prospects, the
impact of the COVID-19 pandemic on the global macroeconomic
environment, and our ability to avoid the delisting of the
Company’s common stock by Nasdaq due to the restructuring or our
inability to maintain compliance with Nasdaq listing
requirements. While we believe these opinions and
expectations are based on reasonable assumptions, such
forward-looking statements are inherently subject to risks,
uncertainties and assumptions about us, including the risk factors
set forth in our annual report on Form 10-K for the fiscal
year ended February 1, 2020, and in our Form 10-Q for the
three-month period ended May, 2, 2020 filed with the United States
Securities and Exchange Commission and with the Autorité des
marchés financiers.
About DAVIDsTEA
DAVIDsTEA is a leading branded retailer and
growing 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 on our e-commerce
platform at www.davidstea.com and through 18 Company-owned and
operated retail stores in Canada. A selection of DAVIDsTEA products
is also available in more than 2,500 grocery stores and pharmacies
across Canada. The Company is headquartered in Montréal,
Canada.
Investor Contact |
Media Contact |
MaisonBrison Communications |
PELICAN PR |
Pierre Boucher |
Lyla Radmanovich |
514-731-0000 |
514-845-8763 |
investors@davidstea.com |
media@rppelican.ca |
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