DavidsTea is permanently closing all of its five stores on Vancouver Island as it plans for a future with just 18 locations in Canada.
The DavidsTea stores in the Hillside and Uptown shopping centres and at 606 Johnson St. had been temporarily closed, along with a store in Nanaimo and another in Courtenay. None will reopen.
On Thursday, the Montreal-based company announced those stores and others will be wound down within 30 days. It is sending out lease termination notices.
B.C. will only have one DavidsTea store remaining, in Vancouver’s Pacific Centre, down from 20.
The move comes after DavidsTea closed 82 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 100 stores in Canada and might permanently close some locations if landlords were unwilling to negotiate suitable leases.
DavidsTea now says it was able to secure new, more favourable leases for 18 of its locations, which will reopen.
The store closures are part of the company’s restructuring plan after it obtained court protection from creditors under the Companies’ Creditors Arrangement Act and Chapter 15 in the United States Bankruptcy Court for the District of Delaware.
It had 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 DavidsTea for April, May and June.
The company obtained creditor protection under the Companies Creditors Arrangement Act and 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 DavidsTea 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,” said company founder, chairman and interim CEO Herschel Segal.
The 18 stores that remain are 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.”
