MONTREAL, Canada—DAVIDsTEA CEO Sylvain Toutant has resigned to pursue personal interests, effective year end. He is the second top-level executive to depart the company since spring.
Toutant joined DAVIDsTEA in June 2014 at the invitation of board members pursuing an initial public offering (IPO) planned for 2015. Under his direction, the company executed a broad expansion in the United States, opening 30 to 40 stores per year with funds from the IPO. But the boost was short-lived as disappointing stock price and unfavorable economic conditions led to losses.
DAVIDsTEA has since recovered with strong quarterly returns and currently operates 208 stores, mainly in Canada. Toutant did not state specific plans but in a joint release issued by DAVIDsTEA he said the decision was difficult.
In March, DAVIDsTEA namesake David Segal resigned his position as brand ambassador—signaling an end to his role in developing many of the company’s innovative mix of flavors and tea blends.
Segal, 35, has since pursued other entrepreneurial interests. He cofounded the company in 2008 in Quebec with his cousin Herschel Segal, founder of the Le Chateau clothing chain. David Segal retains about 10% of the company’s shares. The company surged 42% in value following a hot stock market debut in June 2015 but has since traded in a range from $9 to $12 per share descending from a high of $30.
Sylvain Toutant, CEO of DAVIDsTEA, announces resignation.
More than any competing chain, DAVIDsTEA has continually refreshed its offerings, drawing heavily for inspiration on restaurant dining trends, the emergence of super fruits with health claims, and the ebb and flow of ingredients such as tiny hot peppers that reflect ethnic foods. The company carries a number of traditional teas but the selection of more than 200 varieties is weighted toward herbals and tisanes and fruit tea blends, with flavors such as Jumpy Monkey and Chocolate Rocket. The company invests in exclusive merchandise and relies on malls for exposure. An emphasis on convenience drives sales.
In a report in the Toronto Globe and Mail, the company reported higher sales of $85.5 million—up 25% from a year earlier—and was close to break-even. In the first half of last financial year, it had a $145.3-million loss due to IPO costs.
The company says Toutant will stay until the end of the current fiscal year, ending in January. At the same time, he’ll also cease to be a director.
Toutant served as the President of Keurig Green Mountain Canada from December 2010 to May 2014 and as Chief Operating Officer of Van Houtte from August 2008 to December 2010.
Source: DAVIDsTEA, Toronto Globe and Mail