DavidsTea is continuing to seek more favourable lease conditions, and “ultimately may terminate a significant number” of its 222 leases, Zitella added.
Many of the company’s stores occupy prime locations — such as 1 Place Ville Marie in downtown Montreal, or shopping malls including Promenades St-Bruno — that typically command higher-than-average rents.
DavidsTea’s growth was already slowing before COVID-19 hit, and the company had reached a point where it needed to rationalize, said JoAnne Labrecque, a marketing professor at the HEC Montréal business school.
“This is an example of a company that experienced rapid growth, opened a lot of stores, and finally the concept reached a saturation point,” Labrecque said in a phone interview. “The lockdown accelerated everything. When you don’t have any revenue, the business model quickly becomes unsustainable.”
Source:- Montreal Gazette
