Insolvent beverage retailer DavidsTea is closing 82 stores in Canada and all 42 of its stores in the U.S. as it focuses on its e-commerce business and supplying grocery stores and pharmacies.
The Montreal-based company announced Thursday that it is sending notices to terminate the leases at the 124 stores to take effect in 30 days. The move would affect about half of its workforce of nearly 2,500, including all 366 employees in the United States.
It had warned in mid-June that it could begin a formal restructuring depending on the outcome of its talks with landlords.The store closures are part of its 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.
Chief financial officer Frank Zitella said that with the closure of "a significant number of money-losing stores" it will focus exclusively on e-commerce sale which had a penetration rate of close to 43 per cent in the market before COVID-19.
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