DAVIDsTEA to close all stores in British Columbia except one in Vancouver

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Distressed Montreal-based tea retailer DAVIDsTEA will maintain a permanent closure of 166 Canadian and 42 U.S. stores, while it will only reopen 18 stores across Canada on a date yet to be announced.Of the 18 stores he plans to reopen under what he calls “new, better rental terms,” only one is in British Columbia – at the CF Pacific Center in Vancouver. Analysis of DAVIDsTEA locations before the COVID-19 pandemic showed 28 stores in British Columbia

“The way customers buy has continued to evolve, and we want and need to adapt with you,” the company said on July 30 in a note on its website. “The new retail landscape has forced us to re-evaluate how we can bring tea to our fans most effectively.”

DAVIDsTEA announced earlier this month its restructuring under Canada’s Companies’ Creditors Arrangement Act (CCRA).

“We believe that a select group of our top 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 by as a more sustainable and resilient organization, ”said Herschel Segal, founder, president and interim CEO of the company, in a statement.

Additional Canadian stores are expected to be established in the metropolitan areas of Calgary, Edmonton, Winnipeg, Hamilton, London, Ottawa, Toronto, Montreal and Moncton.

All future DAVIDsTEA stores are expected to be in shopping malls, and only Vancouver, Ottawa and Toronto will have the chain’s downtown locations, said Craig Patterson, owner of Retail Insider Media and retail consultant.

“This is a testament to the strength of downtown Vancouver,” he said. “The fact that they kept their only store in the downtown Vancouver Market is a testament to the importance of retail in downtown Vancouver.

On the other hand, despite six stores that are expected to be in the Montreal metropolitan area, none of the future stores planned by DAVIDsTEA will be in the downtown area of ​​that city, he said.

Patterson also praised DAVIDsTEA’s strategy of retaining certain physical locations.

“It’s important to always have a physical location,” he said. “The International Council of Shopping Centers released a study last year indicating that there is a symbiotic relationship between physical and online retail. You will increase your online sales if you actually have a physical store in the same market. ”

Investors liked the news, pushing DAVIDsTEA stock up seven and a half cents to US $ 0.88, or 9.4%. Shares are down more than 61.7% from a 52-week high of US $ 2.30 and 175% from a 52-week low of US $ 0.32.

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@GlenKorstrom

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