(Photo: 123RF)
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DavidsTea Teas (DTEA), whose stores have been closed since mid-March due to the COVID-19 pandemic, intends to take shelter from its creditors in order to implement a restructuring that will result in a “significant reduction” in the number of its stores.
In announcing its decision to turn to the Companies’ Creditors Arrangement Act (CCAA) on Wednesday, the retailer said it plans to accelerate its shift to online commerce, wholesale trade and accessories.
In its press release, the company explained that it could “ultimately end a significant number” of its 222 leases in Canada as well as in the United States. It will also seek protection from its creditors in American territory.
By revealing its results for the fourth quarter, last month, the tea merchant had not closed the door to the possibility of taking shelter from its creditors.
Through its Bad Days Investments company, Herschel Segal controls DavidsTea in addition to being its interim CEO. The businessman is also the founder of the fashion retailer Le Château, which has just announced that its survival is threatened.
The tea merchant is not the only retailer to have opted for the protection of his creditors since the beginning of the health crisis. Aldo, Reitmans, Sail Plein Air and Frank and Oak have done the same in recent months.
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