DavidsTea to shrink network to 18 stores in Canada after renegotiating leases

DavidsTea to shrink network to 18 stores in Canada after renegotiating leases

MONTREAL — DavidsTea Inc. will shrink its retail store network to 18 Canadian locations as the insolvent beverage chain shutters 82 more stores in the country while dealing with the impact of COVID-19.

The Montreal-based company says it is sending out lease termination notices for the stores and expects them to be wound down within the next 30 days.

The move comes after DavidsTea closed 82 other stores in Canada and all 42 of its stores in the U.S. in early July to focus on its e-commerce business and supplying grocery stores and pharmacies.

The company said at the time that it would seek more favourable lease terms for the remaining 100 stores in Canada and may permanently shut additional locations if landlords are unwilling to negotiate suitable leases.

DavidsTea now says it was able to secure new, more favourable lease terms and conditions for 18 of its locations, which will reopen.

The company has obtained creditor protection under the Companies Creditors Arrangement Act (CCAA) warned in mid-June that it could begin a formal restructuring depending on the outcome of its talks with landlords, who hadn’t received rent from David’s Tea for April, May and June.

“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 company founder, chairman and interim CEO Herschel Segal.

The 18 stores are located in major shopping malls. Seven are in Quebec, five in Ontario and the rest in Alberta, British Columbia, Manitoba and New Brunswick.

“Our decision to reopen these select stores is consistent with our objective to create a leaner, more efficient company, positioned for long-term growth.”

This report by The Canadian Press was first published July 30, 2020.

?

The Canadian Press

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Canadian professional chuckwagon racer reflects on cancelled season

This year would have marked Troy Dorchester’s 28th year of racing.

Town of Castor council moves to reinstate utility cutoffs

The Government of Alberta Utility Deferral Program ended June 18th

Stettler region to welcome new MDF production plant

Great Plains MDF Production Inc building a $750 million straw fibre MDF board plant

QUIZ: A summer’s day on the water

How much do you know about boats and other watercraft?

NHL hit with criticism over English-only version of “O Canada” on Saturday

NHL hit with criticism over English-only version of “O Canada” on Saturday

Blackhawks’ Caggiula suspended for Game 2 vs. Oilers

Blackhawks’ Caggiula suspended for Game 2 vs. Oilers

Jets rebound with 3-2 win over Flames, even qualifying series 1-1

Jets rebound with 3-2 win over Flames, even qualifying series 1-1

Penguins beat Canadiens 3-1 in Game 2 to pull even in best-of-five series

Penguins beat Canadiens 3-1 in Game 2 to pull even in best-of-five series

Danielle Kang wins at Inverness in LPGA return to golf

Danielle Kang wins at Inverness in LPGA return to golf

Thomas holds off Koepka to win WGC in Memphis, reclaim No. 1

Thomas holds off Koepka to win WGC in Memphis, reclaim No. 1

Koepka’s biggest challenge is history in bid for 3 in a row

Koepka’s biggest challenge is history in bid for 3 in a row

Vegas, Dallas players kneel for anthems as protests gain momentum at NHL restart

Vegas, Dallas players kneel for anthems as protests gain momentum at NHL restart

Most Read