DAVIDsTEA Considers Sale

CANADA

Disappointing earnings by DAVIDsTEA led executives to admit during a call with investors that they are exploring strategic alternatives including a possible sale of the company.

Shares have lost more than half their value in the 12 months ending December 2017. Alternatives include a joint-venture partner, the sale of assets, a merger, divestiture, and possible restructuring and retrenchment from expansion into the US as sales at the company’s mall-based locations slow. It is possible a private-equity firm would acquire or refinance the company.

During the earnings call, c.e.o. Joel Silver said e-commerce sales grew by double digits. He said DAVIDsTEA will redesign its website at a cost of $4 million and emphasize product development, getting back to the core mission of selling tea. In the meantime, the company’s board of directors said it would seek advice from financial advisors.