MONTREAL – DavidsTea has reported a $10 million net loss in the first results since founder Herschel Segal took back control of the company’s board.
The Montreal-based retailer said Thursday the results for the quarter that ended Aug. 4 works out to a loss of 39 cents per share, compared with a $5.6 million, or 22 cent per share, loss for the same quarter last year.
Comparable sales were down 14.8 per cent after its product offering “did not resonate with customers,” it was less promotional, and it had less product available for its semi-annual sale, the company said.
Segal, whose Rainy Day Investments owns 46 per cent of DavidsTea shares, clashed with other significant shareholders earlier this year on company leadership, board composition, and the direction of the company.
His slate of directors won by 54 per cent in a vote at its June annual meeting, prompting CEO Joel Silver to resign after the results were announced and Segal said he would step into the role of interim CEO.
Since June, the company has shuffled head office to put more senior leaders in marketing, buying and product development to help turn the company around, said Segal on an earnings call Thursday.
“We have begun collaborative work to reverse the tide of recent negative quarterly results.”
In August, the company said it would start selling its products in 450 Loblaws stores as it looks to push further into the tea bag market in addition to its traditional loose-leaf sales.
Segal said a search for a replacement CEO is ongoing, as is a search for a replacement for its CFO Howard Tafler, who will leave at the end of the month.
At the end of July, shareholders representing 12.8 per cent of the company, filed suit in Quebec Superior Court against Segal and Rainy Day Investments, seeking to have him removed as executive chairman of the board and a new slate of directors be elected.