DavidsTea (NASDAQ:DTEA) is in the news Tuesday after DTEA stock started to soar higher, but what exactly is behind the movement?
It looks like news of DavidsTea not paying rent on one of its locations is behind the change. A recent report notes that the company is being evicted from its Bank Street location in Glebe. The landlord has tried reaching out to the company but is getting no response.
It’s worth pointing out that DavidsTea hasn’t had any of its stores in the U.S. or Canada open since March 17. The company shut down stores at that time to deal with the novel coronavirus, reports Ottawa Citizen.
At first this might just seem like the company is having trouble paying rent since its stores aren’t open, but that might not be all there is to this. It’s also possible that the company is using this time to let leases expire and exit some of its physical retail locations.
An update from DavidsTea back in April made mention of just such a strategy. The company noted that shutting down stores during the coronavirus will allow it to better focus on its wholesale and e-commerce business. If that route has proved beneficial for the company, it might benefit from exiting some of its physical retail locations during the pandemic, Seeking Alpha notes.
It’s unclear exactly what DavidsTea is up to as the company remains quiet, but investors are excited about the eviction news today.
DTEA stock was up 10.5% as of Tuesday afternoon.