David’s Tea co-founder David Segal is pictured at a DavidsTea outlet in Toronto last year. DavidsTea is looking to get a sales jolt from rival retailer Teavana’s demise as competition shrinks. File photo by THE CANADIAN PRESS

DavidsTea sees benefit from Teavana demise

MONTREAL — DavidsTea is looking to get a sales jolt from rival retailer Teavana’s demise as competition shrinks.

“Overall this is a definite positive for the business,” CEO Joel Silver said Thursday during a conference call about its second-quarter results.

He said DavidsTea will particularly benefit at the 38 malls in Canada and 19 in the U.S. where it competes directly with Teavana.

Starbucks announced in July that it would shutter all 379 Teavana stores, including its 54 locations in Canada, by next spring as it seeks to improve sales at its namesake coffee stores.

Asked if Teavana’s closure says anything about the viability of tea retailing, Silver said it merely gives DavidsTea more room to operate since tea wasn’t owner Starbucks area of focus.

There should be no competition in Canada during the holiday season since all stores are expected to be closed by then, he said.

The lessened competition comes as DavidsTea tries to get back on track by delivering what customers want from the company.

It conducted a market survey and plans to launch a new website early next year that will have enhanced capability to handle online orders, ease shopping and accelerate e-commerce. The investment will cost about $4 million.

The Montreal-based company (Nasdaq:DTEA) took a $2.3 million writedown on its U.S. operations as its net losses more than doubled in the second quarter despite increased sales.

It lost $5.6 million or 22 cents for the period ended July 29. That compared to a loss of $2.3 million or nine cents per share a year earlier.

Excluding one time items, adjusted losses were $4.2 million 16 cents per share, compared to a 2.3 million, nine cents per share loss a year ago.

Sales increased 11.2 per cent to $45.7 million as it cleared seasonal products. Same-store sales decreased 0.9 per cent, an improvement from a 5.7 per cent decline in the first quarter.

The company said its Canadian results — which account for 80 per cent of its sales — declined.

DavidsTea added that it will consider closing weak U.S. stores and be selective in opening new ones as its American business remains a “work-in-progress.”

“Overall, DavidsTea results for the second quarter were disappointing but were in line with our expectations given that we are still in the early days of our improvement plan,” Silver told analysts.

DavidsTea operates 236 stores in Canada and the United States.

Just Posted

Lacombe ready to light the night

The Christmas spirit comes to Lacombe Thursday night with the start of… Continue reading

Opioid prescriptions up across country, but daily doses dispensed down: report

TORONTO — The overall number of prescriptions for opioids has increased over… Continue reading

Notley pleads with political foes, allies to support Alberta pipeline projects

OTTAWA — Alberta Premier Rachel Notley issued warnings to all political parties… Continue reading

Uber isn’t saying how many Canadians were affected by year-old hack

TORONTO — Uber is owning up to a year-old security breach that… Continue reading

N. Korea criticizes US over designation as terror sponsor

SEOUL, Korea, Republic Of — North Korea on Wednesday called U.S. President… Continue reading

VIDEO: Replay Red Deer: Nov. 19

Watch news highlights from the week of Nov. 13

Creationist will speak at home-schooling convention in Red Deer

Ken Ham has debated Bill Nye on the Earth’s origins

Update: Innisfail girl found

A 15-year-old missing Innisfail girl has been located safe and sound. Police… Continue reading

Cost to fix Phoenix pay system to surpass $540 million, auditor general says

The federal government’s chronic salary struggles will take more time and more… Continue reading

Red Deer Christmas Bureau to help 1,300 children this year

Demand is high, but Red Deer always provides

CP Holiday train makes stops in Central Alberta

The popular train will feature entertainment from Colin James and Emma-Lee

Kittens rescued after allegedly being tossed from vehicle

Couple finds abandoned kittens new home through Facebook

VIDEO: ‘Party bus’ goes up in flames in Vancouver

Fire crews responded to the late night blaze

Chicken crosses B.C. road, stops traffic

Rooster makes early morning commuters wait in Maple Ridge

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month