DavidsTea Inc. (NASDAQ:DTEA) is filing for bankruptcy under the Companies’ Creditors Arrangement Act, joining a growing list of retailers unable to withstand the COVID-19 pandemic.
The Quebec-based tea chain said filing for protection from its creditors will allow it to restructure its debt and accelerate the company’s transition to online retailing and wholesale distribution in North America.
DavidsTea will pursue a "significant reduction in our brick & mortar presence," Chief Executive Herschel Segal said in a written statement. He said this is the "best path forward to ensure the long-term success and sustainability" of the company. According to DavidsTea’s website, the company has more than 230 stores in Canada and the United States.
The company first indicated it may initiate a formal debt restructuring last month as it looked to close unprofitable store locations. During the restructuring process, DavidsTea will continue to sell its products online, in grocery stores and in pharmacies.
Related Stories
