DavidsTea may be moving to online retail only due to losses from COVID-19.
The tea company announced in a release it is requesting creditor protections and awaiting approval of its restructuring plan under the Companies’ Creditors Arrangement Act by the Quebec Supreme Court.
“As we indicated before, our challenge is to restructure our North American retail footprint in order to decrease the ongoing losses caused by unprofitable stores,” said Herschel Segal, Founder, Chairman and Interim CEO of DAVIDsTEA.
If the restructuring plan is approved, DavidsTea would be primarily online retail, closing down most if not all of its 222 stores.
“I sincerely regret the impact the restructuring of our business will have on some of our exceptional and passionate employees,” said Segal.
“This has been an incredibly difficult decision to take, but a necessary one to ensure the long-term viability of our Company. I would like to sincerely thank our impacted employees for their contributions and for their passion for our brand through the years.”
The company will also be filing a Chapter 15 for its U.S. subsidiary under the United States Bankruptcy Code to follow the same restructuring process there.
