Davidstea: The suite promises to be stormy for Herschel Segal

Now that he has won his battle against management and controls the board of directors of Davidstea, Herschel Segal must compose with three unhappy institutional shareholders who have 37 % of the actions of the Montreal retailer together."They do not speak the language of merchants," said Segal yesterday, on the sidelines of the shareholders' assembly.

Stormy

The tone was set at the start of the assembly by a small shareholder unhappy to learn that he could not speak.The individual got up and left the room shouting: "Continue to fight and plunge the action.At the very end of the assembly, Ben Gisz, partner with TDM asset management - an important institutional shareholder - got up to speak.He was immediately muzzled by the lawyer for Herschel Segal.“This assembly is over.I will not let this man speak.It is contrary to our agreement with the company.Everyone must now get up and leave, "cried Neil Wiener before being inveted by other unhappy shareholders.

Stock market reaction

Herschel Segal's actions of 46 % of Davidstea's shares started with one step ahead of the 37 % actions held by the three main institutional shareholders who supported outgoing management.In the largest volume of transactions recorded this year on the action of Davidstea, the title appreciated 5 % to close to US $ 4.15 yesterday at the Nasdaq.Registered on the stock market three years ago, the action of Davidstea was worth around thirty US dollars in June 2015. The company of 240 shops remains in deficit with losses of 28 million in 2017.

@YungtefliTikkl Yea I'm regretting my decision making as far as food night

— Ratatouille Thu Jun 27 14:47:52 +0000 2013

MAN OF CONFIDENCE

Herschel Segal takes control of the council after having elected the seven administrators he proposed.Disappointed by Davidstea's performance and unable to get along with the former leaders, he believes that the only way to relaunch Davidstea is to have united advice that shares his vision.Thus, Lorenzo Salvaggio, initially expected this spring to occupy a headquarters on the board and who was until recently chief of the exploitation of poor days - the private holding company of Herschel Segal - will hold a managerial position at Davidstea.“We have agreed that I would be more effective in this role.I also prefer to be on the floor and work with people, ”he said yesterday.

TDM does not intend to let go

"We will see what is possible to do to adjust our strategy," said Ben Gisz, associated with TDM asset management, after the assembly.TDM, PORCHLIGHT and EDGEPOINT are the three institutions who tried to block the road to Herschel Segal.“We want the company to performed well.We like the brand, but we do not support Herschel Segal as chairman of the council or manager, "he added.He recently said that Herschel Segal lacked leadership and that his style has contributed to the management rate in management in recent years.This spring, voting advice agencies, ISS and Glass Lewis, had recommended shareholders not to support Herschel Segal.

The "problem" of institutional

After the Assembly, Herschel Segal did not seem to be too much with the words of institutional shareholders."They have a way of watching over their interests," said the 87 -year -old Montreal entrepreneur.“We are operators.We are merchants.We focus on the product.Institutional people first attach importance to money.Money is important because it is the evaluation sheet.But institutional people do not speak the language of merchants.This is the problem, ”says the one who is also the founder of the Montreal retailer Le Château.

The next CEO

The departure of Joel Silver, who had held the CEO of Davidstea for about a year, was quickly confirmed after the Assembly.Herschel Segal takes over."We are going to assess very quickly what we have on hand," he said.According to him, the return to profitability will be done in less than a year."Before the next annual shareholders' meeting," he said.The next CEO will be the seventh of the company since its foundation 10 years ago.In addition to David Segal, there was Jevin Eagle, Sylvain Touteant, Christine Bullen (interim), Joel Silver and now Herschel Segal (interim).

The family succession

If he only wants to Herschel Segal, his daughter Sarah will continue to work at Davidstea.Sarah Segal, 33, has been on leave with pay for a few weeks due to the battle that her father led against senior management.She had abandoned her headquarters to the advice of David's Tea last summer to become vice-president of product development and innovation.It was for her a return to the management team since, between 2010 and 2012, she was responsible for the development of products and the tea service.She is also the owner and founder of Squish candy, a Montreal company of scented jujubes.Ben Gis, from TDM, believes that Herschel Segal is preparing to once entrust the post of CEO to his daughter.

THE PRIORITIES

Herschel Segal said he was in disagreement with the priority of the majority of former administrators who, according to him, was the exploration of strategic spare options.He first wishes to prioritize the recovery of activities in Canada which, according to him, have been neglected.Among other things, he intends to reduce costs, in particular by reducing staff at the Montreal headquarters.To stabilize activities in the United States, according to him, a partnership with a channel specializing in coffee with hundreds of establishments deserves, for example, to be envisaged.