Dear DAVIDsTEA shareholder:
Your vote at the June 14, 2018 meeting of shareholders of DAVIDsTEA has
never been more important. Your vote will determine the path forward for
the company and your investment. You have a choice between two differing
DAVIDsTEA’s renewed board and current management team who have a positive
vision for the future that includes innovative initiatives to enhance value
for ALL shareholders
Herschel Segal and his status quo plan which risks stalling DAVIDsTEA’s
Promising Future with Current Management and Renewed Board
Your company has a promising future. This is something we – the DAVIDsTEA
Board of Directors, management, as well as co-founder and dissident
shareholder, Herschel Segal – all agree on. To realize this promise,
DAVIDsTEA must adapt to new challenges in the retail industry and meet the
evolving expectations of our customers in order to sustain this progress.
The status quo is not an option.
To this end, the DAVIDsTEA board and management have established a vision
for your company anchored around four key pillars, all of which are rooted
in data-driven customer perspectives and a deep understanding of what it
will take to succeed in the future of retail:
Investing in e-commerce
, which is a core part of DAVIDsTEA’s ambitious plan to grow online
Refocusing on merchandising and marketing
to improve our service offerings, leverage our learnings and key
customer insights from the past year to rebuild our product
assortment, and drive new business.
Leveraging our strong brand
to drive sales through wholesale channels and international opportunities.
Building a profitable store network
by focusing on improving the productivity of existing stores and
evaluating the closure of non-performing stores.
This is the future of DAVIDsTEA.
To execute on the go-forward plan, your company needs stability and
sound guidance from a board of directors that brings the right
experience and expertise and that provides a strong, dynamic new
management team with the time and freedom it needs to realize the
vision for the future of your company.
Mr. Segal, through his holding company, Rainy Day Investments Ltd. (RDI),
is proposing an alternative slate of directors that, in addition to giving
him effective control of DAVIDsTEA, represents the status quo. We believe
this would be a step backward for your company.
While we believe that Mr. Segal, as a 46% shareholder, is entitled to
proportionate representation on the board, allowing Mr. Segal to take over
the entire board with his handpicked slate as well as the title of
executive chairman would permit him to run the board and the company like a
family business. This would not serve the interests of all DAVIDsTEA
shareholders. Who will represent the interests of ALL shareholders?
Large Shareholders Express Concerns About Mr. Segal’s Actions
We are not alone in our concerns. Three of DAVIDsTEA’s largest shareholders
– Porchlight Equity Management, LLC (12.8%), TDM Asset Management PTY LTD.
(12.2%), and Edgepoint Wealth Management, Inc. (11.5%) – have independently
expressed their concerns with RDI’s actions and stated they had “serious
concerns with RDI’s current approach and proposal”. In a March 28, 2018
, the three shareholders stated:
“We believe it is important to recognize that, until his recent
resignation, Herschel Segal, RDI’s President, has at all times been an
active member of the Board and, through his influence as a director and
significant shareholder, he has exerted considerable influence over
DTEA’s board composition, management and strategic direction.
While he is within his rights to express concerns with DTEA’s
financial performance and seek change, we believe it is
disingenuous for him to disregard his role in bringing the company
to where it is today and present himself as the only shareholder
whose views and experience should be considered in assembling
“The Board must continue to represent the interests of all
shareholders, not just those of DTEA’s largest shareholder. As such, it
is not in the best interests of DTEA or its shareholders that Mr. Segal
be allowed to reconstitute the Board with his handpicked nominees.”
The Choice is Clear. Vote Your YELLOW Proxy Today.
A vote FOR the DAVIDsTEA board nominees is a vote for stability, progress
and the promise of a new vision for your company. It is a vote for the
future success of DAVIDsTEA, something we all feel passionately about.
Shareholders are encouraged to read the management information circular
which details the many reasons to support management’s board who will take
DAVIDsTEA to the next phase and further the company’s success. Shareholders
will also learn more about why we believe it would be a great concern to
allow Mr. Segal to take control of your company.
It is very important that you act today and cast your vote. Please use the YELLOW
form of proxy today to vote FOR DAVIDsTEA’s nominees, a slate that will act
in the best interests of ALL shareholders.
We appreciate your support as we continue to work on value enhancing
initiatives for the benefit of DAVIDsTEA and its shareholders.
The DAVIDsTEA Board of Directors