TORONTO – David Segal – the David behind DavidsTea Inc. – has resigned as brand ambassador for that Montreal-based tea retailer he created and co-founded.
Segal, who first envisioned developing a boutique business to sell blended loose-leaf teas as he would be a student in Quebec, founded the organization in 2008 with his cousin Herschel Segal, the magnate behind Canadian fashion chain Le Chateau Inc.
In a filing with the U.S. Securities and Exchange Commission on Monday, DavidsTea said Segal left last Friday to “dedicate much more of his time to exploring other entrepreneurial interests.”
Segal, 35, continues to be third-largest shareholder within the company, with nearly 10 % from the outstanding shares.
Though he operated as more of a behind-the-scenes player compared to public-facing voice of the trademark, Segal was credited because the visionary behind the company’s sleek store design, presentation and development and it is seasonally rotating range of tea blends.
He could not be reached for comment on Monday.
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“(Segal) is actually focused on innovation, attempting to develop tea assortment and product,” chief executive Sylvain Toutant said in an interview last fall concerning the company’s founder.
“Innovation within our brand is very important, so people can come back and find out new tastes.”
Last year, Segal had worked to grow the retailer’s choice of matcha, a conventional Japanese green tea, and was recognized to look to food and restaurant trends for insights, infusing new tea blends with fruit, pumpkin and vanilla. Also, he developed a special canister for mixing matcha quickly as well as on a tight schedule, since the traditional process is slow and involves a whisk.
DavidsTea, which competes with Starbucks Corp.-owned Teavana, has been working to expand its store footprint and now has 156 stores in Canada and 37 in the U.S., selling blends of tea, tea accessories along with other products.
In its last fiscal year it opened 39 stores and it is likely to open the same number this year.
“Because they’ve been looking at expansion plans, (Segal) might have had different ideas from that of management and they may not begin to see the same way forward,” said Wendy Evans, a Toronto-based retail consultant, about the co-founder’s departure.
“The business is a good concept. They were trying to use tea what’s been done with coffee – inflate the category making it much broader,” she said. “The issue in my mind is when much is he the brand visionary, therefore, who’s going to fill that role in the company?”
DavidsTea went public to much fanfare last June and it is shares initially soared 42 percent to nearly US$30, but they now trade at below US$12.
At a business conference in January, the organization reiterated its previously issued outlook for fourth quarter and full-year results for fiscal 2015, with sales within the selection of $175 million to $177 million, a similar sales increase slightly over the mid-single-digit range and adjusted per-share income of 37 cents to 39 cents.
hshaw@nationalpost.com
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