Teas, DavidsTea has issued a warning on the 21st of April last from the Nasdaq Stock Market LLC to the effect that it did not meet the requirement of the minimum price according to the rules.
27 April 2020 15h44
Updated at 17: 03
The COVID-19 affects the sales of DavidsTea, which launches a warning
The canadian Press
MONTREAL — While its 231 stores in Canada and the United States are closed because of the COVID-19 since march 17, the company’s Teas DavidsTea could also be the subject of a cancellation on the Nasdaq, where shares are traded of its shares.
The chain, based in Montreal, received a warning on the 21st of April last from the Nasdaq Stock Market LLC to the effect that it did not meet the requirement of the minimum price according to the rules.
This information is found in a document filed with the us regulatory authorities and which is accompanied by a warning made by DavidsTea on its results because of the storm caused by the pandemic.
“The warning has no immediate impact on the rating (the company),” said the retailer, in the document, adding that it had until 28 December to comply with the rules in place.
The company did not want to comment further.
On the Nasdaq, the stock should trade at a minimum of US $ 1. If the title of a company trades below this threshold for 30 consecutive trading days, it receives a notice and has a period of time to comply.
By mid-day, Monday, the action of DavidsTea was trading at 74 US cents. The title was ended at 85 US cents on the 8th of march.
The retailer has also stated that on 18 April – that is, after the first 11 weeks of its financial year – its sales had declined to 23 % compared to the same period last year to approximately $29 million.
Even if the income online have more than doubled (+ 127 %), this has not been sufficient to counterbalance the closure of the entire network of the retailer.
DavidsTea, who tries to straighten out its balance sheet since the co-founder of the company, Herschel Segal, took over its reins in 2018, has warned that the impact of the new coronavirus on its activities would be “important”.
Although its products continue to be available online as well as in supermarkets and pharmacies in the country, “there is no guarantee” that it will reach the volumes previously sold. It is also difficult to say whether the momentum found on the side of e-commerce will continue.
Nevertheless, by way of a press release, the chairman of the board of directors and interim ceo of DavidsTea has shown encouraged the growth of online sales.
“This could represent a turning point (…) and dramatically accelerate the expected change to online sales, thus increasing the long-term profitability and reach a wider audience than ever before ”
DavidsTea has also indicated that its revenue had amounted to $ 73.5 million during the fourth quarter, which represents a decrease of 11.6 % compared to the same period last year. For fiscal year 2019, the company has generated a revenue loss of $ 196.5 million, a decrease of 7.7% compared to the previous year, while online sales and wholesale, totaled $42.2 million.
The company has approximately $ 46 million in cash.
In addition to having being temporarily laid off all employees who worked in its shops, DavidsTea has reduced the work week of its employees in addition to reducing the remuneration of its officers and members of its board of directors.