Rainy Day Investments Urges Shareholders to Vote for Change Now to Put DAVIDsTEA Back on Track

• Rainy Day Investments’ Board nominees, led by Herschel Segal, will focus on a turnaround of DAVIDsTEA for the benefit of all shareholders
• Meanwhile, DAVIDsTEA is shifting its story and making hypocritical charges about Rainy Day Investments’ slate of Board nominees

MONTREAL, May 31, 2018 (GLOBE NEWSWIRE) -- Rainy Day Investments Ltd. (“RDI”) urges shareholders of DAVIDsTEA Inc. (“DAVIDsTEA”) (Nasdaq:DTEA) to vote for RDI’s slate of seven highly-qualified nominees as directors at the annual meeting to be held in Montreal on June 14, 2018.

“It’s time to put DAVIDsTEA back on track.  They want to sell it, we want to fix it,” said Herschel Segal, co-founder of DAVIDsTEA and President of RDI, which holds approximately 46.4% of the outstanding shares of DAVIDsTEA.

Mr. Segal added: “We have proposed seven highly-qualified Canadian nominees, with extensive experience operating retail businesses in Canada.  Our nominees share a common vision about the future of DAVIDsTEA.  We are committed to a turnaround of operations and financial performance for the benefit of ALL shareholders.  On the other hand, the slate of nominees proposed by DAVIDsTEA is non-Canadian and dominated by three investment funds whose interests clearly are not aligned with those of DAVIDsTEA’s long-term, individual shareholders.”

DAVIDsTEA - a shifting story and hypocritical charges

DAVIDsTEA management frequently described 2017 as a “reset” year, yet in a recent press interview the Chief Executive Officer referred to a “three-year turnaround” that began in 2017.  This is the first time that DAVIDsTEA shareholders have been told by management and the current Board of Directors that there is a three-year turnaround plan.  Why weren’t shareholders told about a three-year timeframe before now?

The proxy circular recently issued by DAVIDsTEA places great emphasis on “stability” and states, in effect, that the wholesale change to the Board of Directors proposed by RDI will hurt DAVIDsTEA.  This charge ignores the fact that two of RDI’s nominees, Herschel Segal and Emilia Di Raddo, were until recently directors of DAVIDsTEA.  At the same time, DAVIDsTEA itself proposes that 50% of the Board will be new, with three new Board nominees out of six.  In addition, three current independent directors, including the Chairman of the Board, are not running for re-election as directors.

If stability is so important to DAVIDsTEA and change is so dangerous, why has DAVIDsTEA proposed a wholesale change to the Board, why are three incumbent directors not standing for re-election, and why is DAVIDsTEA talking out of both sides of its mouth?

Why CHANGE at DAVIDsTEA is needed NOW

• Management is ignoring deeply disturbing financial results and historically poor stock performance.
• Specifically, even with an increase in sales, DAVIDsTEA’s gross profit decreased in the 2017 fiscal year; selling, general and administration expenses increased; operating losses for the 2017 fiscal year were approximately four times greater than in the previous fiscal year; all of this led to a loss of $24.7 million in results from operating activities compared to a loss of $6.3 million in the previous year.
• Management continues to spend time and burn cash on a strategic review process when it should be focused on improving operations – management is not focused on the right priorities.
• Management has made questionable decisions, including a failure to respond quickly to changing trends in the way consumers shop - online.

A Plan to Save DAVIDsTEA

Once elected to the Board, RDI’s nominees will work tirelessly on a turnaround of DAVIDsTEA’s financial performance through improved operations, based on the following principles and priorities:

• Focus on and listen to customers, enhance the customer experience and make sure that customers are satisfied, whether in-store or online
• Provide excellent products at a compelling price by rebuilding DAVIDsTEA’s buying department and improving the creativity and efficiency of product development
• Create ongoing, two-way communication between DAVIDsTEA’s head office and its stores, and provide support to the stores and their personnel
• Reduce overhead costs, including a reduction of head office personnel
• Focus on the Canadian market, where the DAVIDsTEA brand has been successful, and expand the number of stores in Canada
• Stabilize operations in the United States
• Assess DAVIDsTEA senior management and make any necessary changes
• Provide clear direction from the Board of Directors to senior management and employees

These basic principles are essential elements for building profits, not increasing losses.

How to Vote for the RDI Nominees

RDI’s nominees are Herschel Segal, M. William Cleman, Pat De Marco, CPA, CA, Emilia Di Raddo, CPA, CA, Max Ludwig Fischer, Ph.D., Peter Robinson and Roland Walton.  RDI mailed a proxy circular dated May 11, 2018 to shareholders, including a BLUE voting instruction form, which allows shareholders to vote FOR the seven nominees.

To vote for RDI’s seven nominees, use only the BLUE voting instruction form.  If you have already voted using the yellow management proxy and wish to vote FOR RDI’s qualified nominees, please vote using the BLUE form.  This will automatically revoke any previous proxies submitted.  To ensure that your vote is counted, please vote even if you are planning to attend the annual meeting.  The deadline to vote your BLUE voting instruction form is at 9:00 a.m. (eastern time) on Tuesday, June 12, 2018.

Shareholders who need assistance in voting their BLUE voting instruction form in favour of the seven RDI nominees should contact RDI’s proxy solicitation agent, Shorecrest Group, by email at contact@shorecrestgroup.com 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 available at www.saveDTEA.com as well as under DAVIDsTEA’s profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

Forward-looking Statements

This press release may contain forward-looking statements with respect to DAVIDsTEA and RDI.  These statements generally can be identified by use of forward-looking words such as “may” “will”, “expect”, “estimate”, “anticipate”, “intends” or “believe” or the negative thereof or similar variations.  Actual results could differ materially from those expressed or implied by such statements.  Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations.  These cautionary statements qualify all forward-looking statements attributable to RDI and persons acting on its behalf.  Unless otherwise stated, all forward-looking statements speak only as of the date of this press release and RDI has no obligation to update such statements, except to the extent required by applicable securities laws.