- Management slate is dominated by three investment funds whose interests are not aligned with those of long-term, individual shareholders
- Management slate lacks Canadian representation
- Management slate lacks nominees with direct Canadian retail operating experience
MONTREAL, May 22, 2018 (GLOBE NEWSWIRE) -- Rainy Day Investments Ltd. (“RDI”) has proposed a slate of seven nominees for election as directors of DAVIDsTEA Inc. (“DAVIDsTEA”) (DTEA, Financial) at the annual meeting to be held in Montreal on June 14, 2018. RDI’s slate is comprised of highly-qualified individuals with extensive experience running Canadian retail businesses. The RDI slate is unified in its conviction that a financial turnaround of DAVIDsTEA can be achieved, and is representative of the interests of individual shareholders who believe in the future of DAVIDsTEA. This is in stark contrast to the slate of nominees proposed by DAVIDsTEA management and current Board of Directors.
Management Slate is Unrepresentative
The management proxy circular recently issued by DAVIDsTEA places great emphasis on good corporate governance and a representative Board of Directors. Unfortunately, the management slate fails its own test of good corporate governance by being unrepresentative of all DAVIDsTEA shareholders. The DAVIDsTEA management slate is comprised of only six nominees, three of whom respectively represent investment funds which hold, in the aggregate, 36.5% of the outstanding shares of DAVIDsTEA. If the management slate is elected, these three investment funds with slightly more than one-third of the outstanding shares would constitute half of DAVIDsTEA’s Board of Directors, and 60% of its “independent” directors.
“If this management slate is elected, three investment funds, who together own about one-third of the shares, will effectively control the Board. That’s not good corporate governance in Canada”, said Herschel Segal, President of RDI and a co-founder of DAVIDsTEA. “These are the same investment funds who believe that the priority of DAVIDsTEA should be a strategic review. That’s why the investment funds want half the Board seats. It is clear that the long-term interests of DAVIDsTEA’s many individual shareholders will be ignored.
“Last year, shareholders elected ten directors at DAVIDsTEA’s annual meeting. This year’s management slate has three representatives of the investment funds, only two of the five incumbent independent directors, plus the Chief Executive Officer. This will turn the Board of Directors into a private club for the three investment funds”, added Mr. Segal.
“RDI has proposed a slate of seven highly-qualified nominees. A clear majority of our nominees will be “independent” directors. The RDI slate of directors is committed to a turnaround of DAVIDsTEA’s operations and financial performance for the benefit of all shareholders”, concluded Mr. Segal.
Non-Canadian Management Slate
DAVIDsTEA is fundamentally a Canadian company, with its head office in Montreal. Of its 240 stores, almost 80% (190 stores) are in Canada while the remaining 50 stores are in the United States. As a result, the Board of DAVIDsTEA should be comprised of directors with extensive knowledge of the Canadian retail industry and an understanding of Canadians.
Of the five “independent” nominees on the DAVIDsTEA management slate, only one is Canadian, while three reside in the United States and one in Australia. RDI questions how well these management nominees understand Canadians and know the day-to-day status of, and emerging trends in, the Canadian retail market.
RDI’s Nominees Have Direct Operating Experience in the Canadian Retail Industry
The Board of DAVIDsTEA should be comprised of directors with direct experience running Canadian retail businesses. The RDI slate includes six nominees who have operated a diverse group of Canadian retail organizations. This compares favourably to the DAVIDsTEA management slate, which has only one nominee with experience operating a retail business in Canada. The six RDI nominees and their respective senior executive positions in the Canadian retail industry are: M. William Cleman, former Chief Executive Officer of Bouclair Inc., a retail chain in the home furnishings sector; Pat De Marco, former President and Chief Executive Officer of Moores Retail Group, a menswear retailer; Emilia Di Raddo, President of Le Château Inc., a retailer of women’s and men’s apparel; Peter Robinson, former Chief Executive Officer of Mountain Equipment Co-op, a Canadian consumers’ cooperative; Roland Walton, former President of Tim Hortons Canada, a fast-food restaurant chain; and Herschel Segal, a founder of DAVIDsTEA and former Chief Executive Officer of Le Château Inc. These six Canadians will bring years of operating experience in the Canadian retail industry to the Board of DAVIDsTEA.
Vote for the RDI Slate of Nominees
RDI has mailed its proxy circular dated May 11, 2018 in response to DAVIDsTEA’s management proxy circular dated May 10, 2018. RDI’s mailing includes a BLUE proxy form or BLUE voting instruction form, which allows shareholders to vote FOR the slate of seven nominees proposed by RDI. Shareholders who need assistance in voting their BLUE proxy form or BLUE voting instruction form in favour of the seven RDI nominees should contact RDI’s proxy solicitation agent, Shorecrest Group, by email at [email protected] or by calling toll free at 1-888-637-5789. Brokers and banks can reach Shorecrest Group at 647-931-7454. RDI’s proxy circular is also available under DAVIDsTEA’s profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
A new website, www.saveDTEA.com, is available on-line and can be consulted by all DAVIDsTEA shareholders.
RDI, which holds approximately 46.4% of the outstanding shares of DAVIDsTEA, is the holding company of Mr. Herschel Segal, a founder of DAVIDsTEA and a director until March 5, 2018.
Investor Contact
Christine Carson
Co-founder & Managing Director
Shorecrest Group
Direct: 1-888-637-5789
E-mail: [email protected]
Media Contact
Lyla Radmanovich
514-845-8763
[email protected]
