DTEA - David's Tea

[merkhet]

Wait, are any of these places online? My wife loves tea and would be happy to find new places.

 

What kind of teas are you interested in? Black? Black flavored? Green? Green flavored? White/flavored? Herbal?

 

I definitely can post what I buy/where in the categories you're interested in. With usual caveats that tastes vary, I'm not a tea gourmet, etc.  8)

 

Wife likes pretty much anything. I’m generally a green tea guy.

 

You're killing me.  8)

 

Black tea, not flavored: I bought this, and I like it: https://smile.amazon.com/gp/product/B003H7KV8Y/ref=ppx_yo_dt_b_search_asin_title?ie=UTF8&psc=1

Black tea flavored: https://smile.amazon.com/Tea-Czar-Nikolas-Premium-Black/dp/B00N4Z5TI6/ref=sr_1_3?dchild=1&keywords=nicholas+tea&qid=1594306300&sr=8-3 ( I only tried the black package. There are packages with other colors with different flavoring, which I have not tried )

Earl Grey: I buy this, but it's OK, not supergreat: https://smile.amazon.com/Akbar-Tea-Earl-Gray-Metal/dp/B003LRWCR8/ref=sr_1_5?crid=3F3VACKMCTPEJ&dchild=1&keywords=akbar+earl+grey+tea&qid=1594306396&sprefix=akbar+earl+g%2Caps%2C159&sr=8-5 ( note that there were reports that 3rd parties send smaller boxes for the price. I buy this in the store, but it is available on Amazon ). I might be interested in any great Earl Grey's that people like.

Green tea not flavored: I don't have a favorite that's accessible online. I buy a bunch of green teas in Lithuania ( Lithuania is the tea capital of the world.  :P ). Including some flavored green teas. These are not available online.

Jasmine green tea: this is bags, but I thought it was great: https://smile.amazon.com/gp/product/B003MQTVHC/ref=ppx_yo_dt_b_search_asin_title?ie=UTF8&psc=1

White tea flavored: I liked Youthberry from Teavana ( https://www.amazon.com/Teavana-Youthberry-Loose-Leaf-White-Tea/dp/B007G92C6I#:~:text=Teavana%20Youthberry%20Loose-Leaf%20White%20Tea%2C%202oz.%201%20The,in%20recommended%20tea%20amount%20per%208%20ounces.%20 ). I might buy it again, since I ran out. But OMFG the price.... they are kidding, no?  :'(

Herbal teas: I have recently discovered that I don't like the over-hibiscussed herbal teas, which is most of them.  :'( So I don't have favorite herbal teas right now.

 

What are the teas you like either from David's or from other places?

 

Fruity Oasis

White Cranberry Bark

Forever Nuts

Cherry Berry Punch

 

Wife’s pregnant so not a lot of caffeine tea happening right now.

 

We used to love Honey Lullaby but they don’t make it anymore. We are pretty sure it was a narcotic given how well it worked as a sleepy time tea.

 

[Jurgis]

Fruity Oasis

White Cranberry Bark

Forever Nuts

Cherry Berry Punch

 

Thanks. Could not find the first two. Not sure about the second two. Maybe gonna try Forever Nuts.

 

I kinda liked Buddha's Blend https://www.davidstea.com/us_en/tea/buddha-s-blend/10348US01VAR0017249.html and Organic Japanese Sencha https://www.davidstea.com/us_en/tea/organic-japanese-sencha/10057US01VAR0012968.html from the teabag set my wife bought. Might buy these. Just have way too much green tea right now.  ::)

[Spekulatius]

Raspberry Royale every once in a while. I miss Ten Rens tea shop when I lived close enough to the Bay Area to go there.

I am a hard core coffee nut anyways. There are cat people ( tea ) and dog people ( coffee) and almost nobody likes both.

[bilo]

Anyone who visited a US location with at least 1/2 of their brain function operating would have known equity holders here were destined to circle the toilet bowl. 

[Jurgis]

I bought a large collection of weirdo teas from their ongoing sale.

So far:

 

Pomegrateful - OKish, not something I'd buy again.

Hot chocolate - OMG, that the heck is this thing... just say no.

 

Might have to get @merkhet's address and send him all the ones that I could not drink...  ::)

[merkhet]

I bought a large collection of weirdo teas from their ongoing sale.

So far:

 

Pomegrateful - OKish, not something I'd buy again.

Hot chocolate - OMG, that the heck is this thing... just say no.

 

Might have to get @merkhet's address and send him all the ones that I could not drink...  ::)

 

[bilo]

I posted a few screenshots of my old research notes on this name, mostly observations from store visits, recently on twitter.  Funny - with hindsight I went out and did the visits hoping for a valid bull case.. didn't turn out that way:  https://twitter.com/natstewart5/status/1281365431610216449

[Jurgis]

Santa's Secret - below mediocre

Lemon Cayenne Cleanse - I kinda liked this one. Not a definite "buy again", but a maybe

Organic Cream of Earl Grey - not my cup of tea (pun intended). Can't say it's bad, just not my taste.

[Jurgis]

Candy Cane Crush - so so. Too minty for me.

Sleigh Ride - meh. My wife kinda liked it.

David's Breakfast Brew - OK black tea. Nothing special, but not bad.

Organic Detox - Not bad.

[Jurgis]

Organic Hangover Helper - drinkable, but meh.

Sweet Tart - not bad though I probably won't order again

Organic Thailand Black - I liked this one. Might order again

Organic Earl Grey - (this is different from Organic Cream of Earl Grey) - It's not bad, but price wise I'll just stick with my current non-David's Earl Grey.

[Jurgis]

Getting close to the end of the teas I ordered (in case someone is bothered by my posting ;))

 

Tulsi Tranquility - not bad

Green Passionfruit - not bad

Forever Nuts - @merkhet suggested this one, but I did not like it at all.

Serenity Now - not bad

[merkhet]

I think you have an audience of one for these posts, and I like the reviews, so carry on!

[ratiman]

It's not hard to get this to $10. At 3.25x $80mm revenues (excluding the store revenues) that's a $10 stock. Tazo was bought by Unilever in 2018 at a 3.4 multiple.

[ratiman]

It's not hard to get this to $10. At 3.25x $80mm revenues (excluding the store revenues) that's a $10 stock. Tazo was bought by Unilever in 2018 at a 3.4 multiple.

 

I'm upping my revenue estimate to US$100mm including the stores and it should at a bare minimum trade at 1.5 revenues. 18 stores at $20mm revenue isn't bad. JDE Peets sells at 3.5x revenues and Unilever is expected to sell its declining black tea portfolio at 2x+ so DT deserves at least a 2x. At 1.5x it's a $5.5 and at 2x it's $7.50. Sarah Segal is now in charge and it was poignant to hear the 90 year old "Hersh" pass the torch to his daughter.

[Jurgis]

I'm still doing my job to support David's sales. Ordered a bunch on Black Friday and they still have not delivered it. Apparently they were swamped with orders.

 

Have been slowly going through the ones I ordered and mentioned before. Plus sheng pu'erh - it's not bad, but I'm not very much pu'erh fan.

 

You guys should send me tea donations for single-handedly keeping up the sales of this poor company.  8)

 

 

[Edward]

Help me to understand something.

 

These guys were never really profitable, however the company is still worth 50M$ on 200M$ sales. And this is attractive why?

[ratiman]

Sales are closer to US$100mm. Tea is a perfect internet product because it's easy to ship, no returns, huge markups, brand loyalty, repeat purchases, long tail. The stores are for acquiring customers but they're horrible for serving repeat customers. DTEA has already made the upfront investment in customer acquisition via the huge investment in the stores and now the customers are hooked on their favorite blend and internet and supermarket distribution is much cheaper.

[TBW]

Were they able to rid themselves of many leases during the bankruptcy process? Did they close most of their US stores?

 

What about the family running the business, they have proven to be pretty bad, though the disaster that was the US expansion wasn't totally their fault.

 

The Cad business was always very good. I stopped paying attention when it looked like they had to file for bk, but if that process helped them shed bad leases, then perhaps it is worth a second look.

[ratiman]

Were they able to rid themselves of many leases during the bankruptcy process? Did they close most of their US stores?

 

What about the family running the business, they have proven to be pretty bad, though the disaster that was the US expansion wasn't totally their fault.

 

The Cad business was always very good. I stopped paying attention when it looked like they had to file for bk, but if that process helped them shed bad leases, then perhaps it is worth a second look.

 

The landlords submitted C$49mm of claims, that will get reduced in negotiations. DTEA has about C$58mm in cash and working capital and so it's got the landlord liabilities covered. Depending on the final number and how Christmas goes, DTEA should get through the BK process with some cash on the balance sheet.

 

As for the Segals, Sarah is probably fine as a CEO. She is right in the target demo which is a huge advantage. 

[deleuze68]

They also have about $18 million in payables and $4 million in severance costs they need to negotiate. Unless the landlords are willing to take a significant cut (and I don't know why they would as many of these locations will be hard to re-lease in this climate) David's is not going to have enough cash to cover all their liabilities. Does anyone know how this would play out? Would landlords be issued shares in lieu of cash or would another financing partner be brought on for a stake in the restructured company? Obviously entering bankruptcy and a forced liquidation ould be the worst case scenario.

[Jurgis]

Anecdotally, even though I buy from DTEA sometime, I still think that most of their teas are overpriced and most of their flavored mixes are crap that I would not drink for free. I'm guilty of getting sucked into trying some of their stuff though. ::) JMO.

[Edward]

Sales are closer to US$100mm. Tea is a perfect internet product because it's easy to ship, no returns, huge markups, brand loyalty, repeat purchases, long tail.

Personally I view tea as a commodity product. Sure there are blends but you eventually figure out that it's green tea with some flavor an just get some green tea in bulk. I have doubts.

[Liberty]

Anecdotally, even though I buy from DTEA sometime, I still think that most of their teas are overpriced and most of their flavored mixes are crap that I would not drink for free. I'm guilty of getting sucked into trying some of their stuff though. ::) JMO.

 

Most days I drink their plain sencha and it's fine. My fave is Harney & Sons, but I feel bad paying that much for tea + the shipping to Canada..

[Jurgis]

Anecdotally, even though I buy from DTEA sometime, I still think that most of their teas are overpriced and most of their flavored mixes are crap that I would not drink for free. I'm guilty of getting sucked into trying some of their stuff though. ::) JMO.

 

Most days I drink their plain sencha and it's fine. My fave is Harney & Sons, but I feel bad paying that much for tea + the shipping to Canada..

 

Yeah, their plain teas are OK. Just - with some exceptions - mostly not worth the price IMO. I liked Organic Thailand Black, but pretty expensive.

Most of the ones I ordered on Black Friday are plain teas. Will report here when I receive and try them.  8)

[ratiman]

They also have about $18 million in payables and $4 million in severance costs they need to negotiate. Unless the landlords are willing to take a significant cut (and I don't know why they would as many of these locations will be hard to re-lease in this climate) David's is not going to have enough cash to cover all their liabilities. Does anyone know how this would play out? Would landlords be issued shares in lieu of cash or would another financing partner be brought on for a stake in the restructured company? Obviously entering bankruptcy and a forced liquidation ould be the worst case scenario.

 

The listed rent liabilities are undiscounted and will be further negotiated down. DT has already paid forward months of payables so the payables number has, in effect, already been paid. Segal has said there won't be dilution, which is pretty definitive.