A Montreal-based beverage retailer that filed for creditor protection earlier this month owes Ottawa landlords a collective total of nearly $400,000.
DavidsTea said earlier this month that it is closing 82 stores in Canada and all 42 of its locations in the United States as it focuses on its e-commerce business and supplying grocery stores and pharmacies. The company announced it was sending notices to terminate the leases at the 124 stores to take effect in 30 days.
Several owners of Ottawa retail properties are on the Montreal tea merchant’s list of creditors.
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The largest single local creditor is the Rideau Centre, which is owed $113,095. Next on the list is Ivanhoe Cambridge’s Bayshore Shopping Centre, which is owed $69,050.
That’s followed closely by a Morguard property, the St. Laurent Shopping Centre, at $56,833. Primaris REIT-owned Place d’Orléans is due a total of $41,607, while Kanata’s Tanger Outlets mall is owed $35,979.
Cushman & Wakefield, which manages Billings Bridge Shopping Centre, is owed $33,059. Other local landlords on the list include Sleepwell Management, which is owed $21,067, and Brickstone Holdings, which is owed $16,950.
Still, the total of about $387,000 DavidsTea owes to Ottawa landlords pales in comparison to its list of debts in some other Canadian cities. In the Greater Vancouver Area, for example, the tea retailer reportedly owes nearly $980,000 to several mall owners.
DavidsTea also said it will also seek more favourable lease terms for its remaining 100 stores in Canada and may permanently shut additional locations if landlords are unwilling to negotiate suitable leases.
The chain had warned in mid-June that it could begin a formal restructuring depending on the outcome of its talks with landlords. The company said at the time that it hadn’t paid rent on any of its stores for April, May and June.
The store closures are part of its restructuring plan after it obtained court protection from creditors under the Companies’ Creditors Arrangement Act and Chapter 15 in the United States Bankruptcy Court for the District of Delaware. Last week, a Quebec Superior Court judge approved an amended order, which extends protection from creditors in Canada until Sept. 17.
DavidsTea last month reported that it lost $23.2 million last year on $146.5 million in revenues. That includes a US$4.3 million loss in its fiscal fourth quarter on US$54.8 million of revenues.
Property owners aren’t the Ottawa businesses affected by the retailer’s financial struggles.
Kanata-based custom packaging firm 2ii Inc. is owed more than $30,000, while Gatineau software company Foko, which makes an instant communication platform aimed at retailers, is on the hook for nearly $7,300.
– With files from the Canadian Press
