0001477932-20-005516 | 10-Q | XBRL Viewer

Cover - shares	6 Months Ended
Cover - shares	Aug. 01, 2020	Sep. 17, 2020
Cover [Abstract]
Entity Registrant Name	DAVIDsTEA Inc.
Entity Central Index Key	0001627606
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--02-02
Entity Small Business	false
Entity Shell Company	false
Entity Emerging Growth Company	true
Entity Current Reporting Status	Yes
Document Period End Date	Aug. 01, 2020
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2021
Entity Ex Transition Period	true
Entity Common Stock Shares Outstanding		26,208,129
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes

INTERIM CONSOLIDATED BALANCE SHEETS - CAD ($) $ in Thousands	Aug. 01, 2020	Feb. 01, 2020
ASSETS
Cash	$ 34,285	$ 46,338
Accounts and other receivables	6,757	6,062
Inventories	24,354	22,363
Income tax receivable	223	1,196
Prepaid expenses and deposits	8,476	4,542
Total current assets	74,095	80,501
Property and equipment	3,086	17,737
Intangible assets	4,693	6,339
Right-of-use assets	7,292	35,082
Total assets	89,166	139,659
Current
Trade and other payables	26,642	20,794
Deferred revenue	6,268	6,852
Provisions	47,818	0
Current portion of lease liabilities	6,545	16,434
Total current liabilities	87,273	44,080
Non-current portion of lease liabilities	21,265	72,230
Total liabilities	108,538	116,310
Commitments and contingencies	0	0
Equity
Share capital	113,119	112,843
Contributed surplus	1,602	1,577
Deficit	(135,282)	(92,278)
Accumulated other comprehensive income	1,189	1,207
Total equity (deficiency)	(19,372)	23,349
Total liabilities and equity (deficiency)	$ 89,166	$ 139,659

INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) - CAD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 01, 2020	Aug. 03, 2019	Aug. 01, 2020	Aug. 03, 2019
INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
Sales	$ 23,031	$ 39,167	$ 55,273	$ 83,432
Cost of sales	14,694	17,362	32,263	35,291
Gross profit	8,337	21,805	23,010	48,141
Selling, general and administration expenses	7,409	31,563	29,042	59,583
Restructuring plan activities, net	(3,172)	0	34,228	0
Results from operating activities	4,100	(9,758)	(40,260)	(11,442)
Finance costs	1,559	1,781	3,226	3,608
Finance income	(68)	(195)	(308)	(386)
Net income (loss)	2,609	(11,344)	(43,178)	(14,664)
Items to be reclassified subsequently to income:
Cumulative translation adjustment	1,451	255	(18)	(242)
Total comprehensive income (loss)	$ 4,060	$ (11,089)	$ (43,196)	$ (14,906)
Net income (loss) per share:
Basic	$ 0.10	$ (0.44)	$ (1.65)	$ (0.56)
Fully diluted	$ 0.10	$ (0.44)	$ (1.65)	$ (0.56)
Weighted average number of shares outstanding
Basic	26,128,971	26,056,520	26,108,499	26,038,128
Fully diluted	26,925,264	26,056,520	26,108,499	26,038,128

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS - CAD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 01, 2020	Aug. 03, 2019	Aug. 01, 2020	Aug. 03, 2019
OPERATING ACTIVITIES
Net Income (loss)	$ 2,609	$ (11,344)	$ (43,178)	$ (14,664)
Items not affecting cash:
Depreciation of property and equipment	301	1,359	1,544	2,684
Amortization of intangible assets	571	456	1,083	855
Amortization of right-of-use assets	454	3,114	2,693	6,216
Gain on modification of lease liabilities	(54,735)	0	(54,735)	0
Provisions	47,818	0	47,818	0
Interest on lease liabilities	1,559	1,781	3,187	3,608
Loss on disposal of property and equipment and right-of-use assets	1,542	22	1,542	22
Impairment of property and equipment and right-of-use assets	0	5,025	39,960	5,025
Stock-based compensation expense	267	143	580	270
Sub-total	386	556	494	4,016
Net change in other non-cash working capital balances related to operations	(4,209)	2,527	(8,373)	(573)
Cash flows from (used in) operating activities	(3,823)	3,083	(7,879)	3,443
FINANCING ACTIVITIES
Proceed from issuance of common shares pursuant to exercise of stock options	3	0	3	0
Payment of lease liabilities	(1,198)	(5,799)	(5,574)	(11,622)
Cash flows used in financing activities	(1,195)	(5,799)	(5,571)	(11,622)
INVESTING ACTIVITIES
Additions to property and equipment	(40)	(319)	(312)	(734)
Additions to intangible assets	0	(958)	(317)	(1,663)
Repayment (issuance) of loan from a Company controlled by an executive employee	0	(1,773)	2,026	(1,773)
Cash flows from (used in) investing activities	(40)	(3,050)	1,397	(4,170)
Decrease in cash during the period	(5,058)	(5,766)	(12,053)	(12,349)
Cash, beginning of the period	39,343	35,491	46,338	42,074
Cash, end of the period	34,285	29,725	34,285	29,725
Cash paid for:
Interest	0	0	0	0
Income taxes (classified as operating activity)	0	0	0	0
Cash received for:
Interest	68	210	279	405
Income taxes (classified as operating activity)	$ 563	$ 168	$ 870	$ 168

INTERIM CONSOLIDATED STATEMENTS OF EQUITY (DEFICIENCY) - CAD ($) $ in Thousands	Total	Share Capital [Member]	Deficit [Member]	Contributed Surplus [Member]	Accumulated other comprehensive loss
Balance, amount at Feb. 01, 2019	$ 54,123	$ 112,519	$ (61,293)	$ 1,400	$ 1,497
Statement [Line Items]
Net loss for the six months ended August 3, 2019	(14,664)	0	(14,664)	0	0
Other comprehensive loss	(242)	0	0	0	(242)
Total comprehensive loss	(14,906)	0	(14,664)	0	(242)
Common shares issued on vesting of restricted stock units	(93)	273	195	(561)	0
Stock-based compensation expense	270	0	0	270	0
Balance, amount at Aug. 03, 2019	39,394	112,792	(75,762)	1,109	1,255
Balance, amount at Jan. 31, 2020	23,349	112,843	(92,278)	1,577	1,207
Statement [Line Items]
Net loss for the six months ended August 3, 2019	(43,178)	0	(43,178)	0	0
Other comprehensive loss	(18)	0	0	0	(18)
Total comprehensive loss	(43,196)	0	(43,178)	0	(18)
Common shares issued on vesting of restricted stock units	(108)	272	174	(554)	0
Stock-based compensation expense	580	0	0	580	0
Issuance of common shares	3	4	0	(1)	0
Balance, amount at Aug. 01, 2020	$ (19,372)	$ 113,119	$ (135,282)	$ 1,602	$ 1,189

- Definition

The amount of residual interest in the assets of the entity after deducting all its liabilities.

+ References + Details

- Definition

The total of income less expenses from continuing and discontinued operations, excluding the components of other comprehensive income. [Refer: Other comprehensive income]

+ References

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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/exampleRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/exampleRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

CORPORATE INFORMATION

6 Months Ended

Aug. 01, 2020

Note 1 - CORPORATE INFORMATION

The unaudited condensed interim consolidated financial statements of DAVIDsTEA Inc. and its subsidiary (collectively, the “Company”) for the three and six-month periods ended August 1, 2020 were authorized for issue in accordance with a resolution of the Board of Directors on September 21, 2020. The Company is incorporated and domiciled in Canada and its shares are publicly traded on the Nasdaq Global Market under the symbol “DTEA”. The registered office is located at 5430 Ferrier St., Town of Mount-Royal, Québec, Canada, H4P 1M2.

The Company is a branded retailer and growing mass wholesaler of specialty tea, offering a differentiated selection of proprietary loose-leaf teas, pre-packaged teas, tea sachets and tea-related gifts and accessories through its e-commerce platform at www.davidstea.com and in 18 Company-owned and operated retail stores in Canada. A selection of DAVIDsTEA products is also available in more than 2,500 grocery stores and pharmacies across Canada. The results of operations for the interim period are not necessarily indicative of the results of operations for the full year. Sales fluctuate from quarter to quarter. Sales are traditionally higher in the fourth fiscal quarter due to the year-end holiday season and tend to be lowest in the second and third fiscal quarters because of lower customer engagement during the summer months.

In March 2020, the outbreak of a novel strain of coronavirus (“COVID-19”) was declared a global pandemic by the World Health Organization and on March 17, 2020, in response to the COVID-19 pandemic, the Company announced the temporary closure of all of its retail stores in Canada and the United States. On August 21, 2020, the Company re-opened 18 stores across Canada.

The Company qualifies for the Canada Emergency Wage Subsidy (“CEWS”) under the COVID-19 Economic Response Plan of the Government of Canada. During the first and second quarters of Fiscal 2020, the Company recognized payroll subsidies of $0.8 million and $1.2 million respectively under this wage subsidy program as a reduction in the associated wage costs which the Company incurred, which were recognized in Selling, general and administration expenses.

On July 8, 2020, the Company announced that it is implementing a restructuring plan (the “Restructuring Plan”) under the Companies’ Creditors Arrangement Act (Canada) (the “CCAA”) in order to accelerate its transition to predominantly an online retailer and wholesaler of high-quality tea and accessories and that during the restructuring process, the Company would continue to operate its online business through its e-commerce platform at www.davidstea.com and its wholesale distribution channel, through which it sells a selection of DAVIDsTEA products in grocery stores and pharmacies across Canada. Following a careful review of available options to stem the losses from its brick-and-mortar footprint, the Company’s management and Board of Directors determined that a formal restructuring process was the best option in the context of an increasingly challenging retail environment, further exacerbated by the COVID-19 pandemic.

On July 8, 2020, the Company obtained an Initial Order pursuant to the CCAA from the Québec Superior Court in order to implement the Restructuring Plan (the “Initial Order”).

On July 9, 2020, the United States Bankruptcy Court for the District of Delaware entered an order in favor of the Company under Chapter 15 of the United States Bankruptcy Code. The order of the United States Bankruptcy Court provisionally recognized the proceedings under the CCAA and enforced the Initial Order, in effect providing protection to the Company from creditor action against its assets in the United States.

As part of its Restructuring Plan and further to obtaining the Initial Order, the Company, on July 10, 2020, sent notices to terminate leases for 82 of its stores in Canada and all 42 stores in the United States. These lease terminations were effective on August 9, 2020.

On July 16, 2020, the Company obtained an Amended and Restated Initial Order from the Québec Superior Court, extending to September 17, 2020 the application of the Initial Order. The Amended and Restated Initial Order also dealt with certain administrative matters, particularly with regards to the lease terminations.

On July 30, 2020, the Company sent notices to terminate leases for an additional 82 of its stores in Canada. These lease terminations were effective on August 29, 2020.

On September 17, 2020, the Québec Superior Court extended the stay of all proceedings against the Company to December 15, 2020 and issued a Claims Process Order establishing the claims procedures for the Company’s creditors under the CCAA. This Order, among other things sets November 6, 2020 as the time by which creditors must submit their claims to PwC, the Court-appointed Monitor.

BASIS OF PREPARATION AND GOING CONCERN UNCERTAINTY

6 Months Ended

Aug. 01, 2020

Note 2 - BASIS OF PREPARATION and GOING CONCERN UNCERTAINTY

These unaudited condensed interim consolidated financial statements have been prepared in accordance with IAS 34, “Interim Financial Reporting” as issued by the International Accounting Standards Board (“IASB”). Accordingly, these financial statements do not include all of the financial statement disclosures required for annual financial statements and should be read in conjunction with the Company’s audited consolidated financial statements for the year ended February 1, 2020, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the IASB. In management’s opinion, the unaudited condensed interim consolidated financial statements reflect all the adjustments that are necessary for a fair presentation of the results for the interim period presented. These unaudited condensed interim consolidated financial statements have been prepared using the accounting policies and methods of computation as outlined in note 3 of the consolidated financial statements for the year ended February 1, 2020, other than as disclosed in note 3 below.

Going Concern Uncertainty

In December 2019, a novel strain of coronavirus, responsible for COVID-19, was first reported and was subsequently declared a pandemic by the World Health Organization in March 2020. The measures adopted by the federal, provincial and state governments in order to mitigate the spread of the outbreak required the Company to close all of its retail locations across North America effective March 17, 2020. On August 21, 2020, the Company re-opened 18 of its stores throughout Canada.

On July 8, 2020, the Company announced that it was implementing the Restructuring Plan under applicable laws in both Canada and in the United States in order to accelerate its transition to predominantly an online retailer and wholesaler of high-quality tea and accessories. As part of the Restructuring Plan, the Company sent notices to terminate leases for 82 of its stores in Canada and all 42 of its stores in the United States. On July 30, 2020, the Company sent notices to terminate leases for an additional 82 of its stores in Canada and continues to negotiate with landlords for the remaining 18 stores.

Although the Company continues to offer its products directly to consumers through its online store and in supermarkets and drugstores across Canada, it is unlikely that customers will purchase its products at previous volumes through these alternative channels. Furthermore, the duration and impact of the COVID-19 pandemic is unknown and may influence consumer shopping behavior and consumer demand including online shopping. Notwithstanding that the Company expects to emerge from the restructuring process as a leaner organization, there is no assurance that the Restructuring Plan will be successful and that all relevant and required regulatory, creditor and court approvals will be obtained.

For the three and six-month periods ended August 1, 2020, the Company reported a net income of $2.6 million and incurred a net loss of $43.2 million, respectively. The Company’s current liabilities total $86.6 million as at August 1, 2020. As at August 1, 2020, the Company held cash and accounts and other receivables of $41.0 million. The Company does not currently have any third-party financing available with which to meet any future financial obligations.

The Company’s ability to continue as a going concern is dependent on its ability to stabilize its business from unfavorable trend lines, strengthening its business by focusing on how to grow its product portfolio including sales and customer service execution, and structuring its operations to ensure it successfully emerges with a leaner, more sustainable physical presence that complements a growing world-class online and grocery business, supported by a right-sized support organization.

Management believes that there is material uncertainty surrounding the Company’s ability to execute the strategy necessary to return to profitability in the current environment, including the unpredictability surrounding the recovery from the COVID-19 pandemic, changes in consumer behavior and the ability to successfully emerge from the Restructuring Plan process.

As a result, these events and conditions indicate that a material uncertainty exists that raises substantial doubt about the Company’s ability to continue as a going concern and, therefore, realize its assets and discharge its liabilities in the normal course of business.

These interim condensed consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue its operations for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. These interim condensed consolidated financial statements as at and for the three and six-month periods ended August 1, 2020 do not include any adjustments to the carrying amounts and classification of assets, liabilities and reported expenses that may otherwise be required if the going concern basis was not appropriate. Such adjustments could be material.

CHANGES IN ACCOUNTING POLICIES

6 Months Ended

Aug. 01, 2020

Note 3 - CHANGES IN ACCOUNTING POLICIES

Recently Issued Accounting Pronouncements

On May 28, 2020, the IASB issued an amendment to IFRS 16, Leases to make it easier for lessees to account for COVID-19-related rent concessions such as rent holidays and temporary rent reductions.

The amendment exempts lessees from having to consider individual lease contracts to determine whether rent concessions occurring as a direct consequence of the COVID-19 pandemic are lease modifications and allows lessees to account for such rent concessions as if they were not lease modifications. It applies to COVID-19-related rent concessions that reduce lease payments due on or before June 30, 2021.

The amendment is effective as of June 1, 2020 but can be applied immediately in any financial statements—interim or annual—not yet authorized for issue. The Company applied the practical expedient to all rent concessions meeting the criteria as set out in the amendment, as of February 2, 2020. With respect to rent concessions not meeting the definition of a lease modification, the Company elected to account for such concessions by continuing to account for the lease liability and right-of-use asset using the rights and obligations of the existing lease and recognizing a separate lease payable in the period in which the allocated lease cash payment is due. As a result of the Initial Order obtained from the Québec Superior Court on July 8, 2020, any rent concessions provided by landlords are accordingly nullified.

SIGNIFICANT ACCOUNTING JUDGEMENTS ESTIMATES AND ASSUMPTIONS

6 Months Ended

Aug. 01, 2020

Note 4 - SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of condensed interim consolidated financial statements requires management to make estimates and assumptions using judgments that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense during the reporting period. Estimates and other judgments are continually evaluated and are based on management’s experience and other factors, including expectations about future events that are believed to be reasonable under the circumstances. Actual results may differ from those estimates.

In preparing these unaudited condensed interim consolidated financial statements, critical judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those referred to in note 5 of the consolidated financial statements for the year ended February 1, 2020.As of February 2, 2020, the Company also considered the impacts related to COVID-19 and the Restructuring Plan to its use of estimates and judgments, as appropriate, within its unaudited interim condensed consolidated financial statements. Estimates and assumptions are subject to inherent uncertainty, which may result in actual amounts differing from reported amounts.

Key sources of estimation uncertainty

Lease termination

As a result of the termination of leases pursuant to the Restructuring Plan in the second quarter of 2020, the Company has recorded an estimate for allowed claim in the amount of $42.9 million. The estimate for allowed claim is based on the Company’s best estimate and is determined based on the total undiscounted lease liability offset by an estimate of the losses that affected landlords will be able to successfully mitigate. Accordingly, an expense of $42.9 million was recorded in Restructuring plan activities, net in the unaudited interim consolidated statement of income (loss). This provision is subject to significant estimation uncertainty, as proceedings are in a preliminary stage. Changes to the provision in future periods may be material and will be recorded through earnings.

Recoverability and impairment of non-financial assets

The temporary store closures as a result of COVID-19, as well as the permanent closure of a majority of our retail stores resulting from the Restructuring Plan, and the related reduction in operating income during the first and second quarters of fiscal 2020 are considered to be indicators of impairment and the Company performed an assessment of recoverability for the property and equipment and right-of-use assets associated with its retail locations.

Key judgments in applying accounting principles

Lease liabilities

The temporary store closures as a result of COVID-19, and the resulting non-payment of rent for the months of April, May, June and part of July as well as the Restructuring Plan led the Company to make significant judgements with respect to the impacts of these events on the lease liabilities as of August 1, 2020. These include considerations such as the accounting for rent concessions, and the timing of termination of leases.

For all leases terminated as a result of the CCAA filing and for which the notice period had expired, lease liabilities under IFRS 16 were determined to have been modified.

INVENTORIES

6 Months Ended

Aug. 01, 2020

Note - 5 INVENTORIES

During the three and six-month periods ended August 1, 2020, inventories recognized as cost of sales amounted to $6,104 and $14,760, respectively [August 3, 2019 - $11,623 and $23,617, respectively]. During the three and six-month periods ended August 1, 2020, the cost of inventory includes write-downs of nil and $560, respectively [August 3, 2019 – reversals of write downs of $493 and $493, respectively] recorded as a result of net realizable value being lower than cost.

	August 1,		February 1,
	2020		2020
	$		$
Finished goods		20,018		18,590
Goods in transit		2,628		2,059
Packaging		1,708		1,714
		24,354		22,363

PROPERTY AND EQUIPMENT AND RIGHT-OF-USE ASSETS

6 Months Ended

Aug. 01, 2020

Note 6 - PROPERTY AND EQUIPMENT AND RIGHT-OF-USE ASSETS

An assessment of impairment indicators was performed which caused the Company to review the recoverable amount of the property and equipment, and right-of-use assets for certain cash generating units (“CGUs”) with an indication of impairment. CGUs reviewed included stores to be permanently closed as part of the Restructuring Plan and the remaining stores that are expected to perform below the Company’s previous projections.

As a result, the Company recorded an impairment loss of $13.0 million and nil in the first and second quarters of 2020 respectively, related to property and equipment, [first and second quarter of 2019, respectively, nil and nil] and $27.0 million and nil in the first and second quarters of 2020, respectively, related to right of use assets [first and second quarter of 2019, respectively, nil and $5.0 million].

Included in the amount above, for property and equipment, is an impairment loss of $12.8 million for the 206 stores to be permanently closed as part of the Restructuring Plan. The remaining $0.2 million of impairment loss was determined by comparing the carrying amount of the CGU’s net assets with their respective recoverable amounts based on value in use for 7 of the 18 stores that remain open.

Included in the amount above, for right of use assets, is an impairment loss of $24.6 million for the 206 stores to be permanently closed after the completion of the Restructuring Plan and the remaining impairment loss of $2.4 million pertain to 7 of the 18 stores that remain open.

For these stores, a value in use of $791 for the first quarter of 2020, [August 3, 2019 – $3,924] was determined based on management’s best estimate of expected future cash flows from use over the remaining lease terms. This determination considered historical experience as well as current economic conditions, including the expected reopening date and the timeframe to foot traffic recovery in those location, and was then discounted using a pre‑tax discount rate of 13.0% for the first quarter of 2020 [August 3, 2019 – 11.9%].

For the three and six-month periods ended August 1, 2020, the depreciation expense was $301 and $1,544 respectively [August 3, 2019 - $1,359 and $2,684, respectively]; with $1,186 recorded in the Canada segment [August 3, 2019 - $2,318], $358 recorded in the U.S. segment [August 3, 2019 - $366], and $305 recorded in corporate selling, general and administration expenses [August 3, 2019 - $257]. Depreciation expense, and impairment losses are reported in the consolidated statement of loss and comprehensive loss under Selling, general and administration expenses (Note 11).

Depreciation expense and impairment losses related to right-of-use assets have been recorded in Selling, general and administration expenses (Note 11) in the consolidated statement of loss and comprehensive loss.

For Right-of-use assets, for the three and six-month periods ended August 1, 2020, the depreciation expense was $454 and $2,693 respectively [August 3, 2019 - $3,114 and $6,216, respectively]; with $2,416 recorded in the Canada segment [August 3, 2019 - $5,059], and $277 recorded in the U.S. segment [August 3, 2019 - $1,157].

RESTRUCTURING PLAN

6 Months Ended

Aug. 01, 2020

Note - 7 RESTRUCTURING PLAN

(a) Liabilities subject to compromise

As a result of the Initial Order obtained on July 8, 2020 and subsequent amendments (note 1), the payment of liabilities owing as of July 8, 2020 is stayed, and the outstanding liabilities, as well as any additional outstanding claims by creditors are subject to compromise pursuant to a plan of arrangement that is expected to be presented to creditors. Obligations for goods and services provided to the Company after the filing date of July 8, 2020 are discharged based on negotiated terms and conditions.

As of August 1, 2020, liabilities subject to compromise amounted to $68.0 million and are made up of trade and other payables, provisions related to lease terminations and severance. These liabilities may also be subject to future adjustments depending on Bankruptcy Court actions, further developments with respect to disputed claims, determination of secured status of certain claims, the determination as to the value of any collateral securing claims, proof of claims or other events.

(b) PROVISIONS

	As at
	August 1,
	2020
	$
Lease termination		42,878
Severance		4,940
Provisions		47,818

Leases

During the second quarter of 2020, in connection with the termination of leases pursuant to the Restructuring Plan, the Company reduced its lease liabilities by $54.7 million, resulting in a gain on the modification of lease liabilities reported in Restructuring plan activities, net (note 8).

In addition, as a result of the termination of leases pursuant to the Restructuring Plan in the second quarter of 2020, the Company has recorded an estimate for allowed claim in the amount of $42.9 million. The estimate for the allowed claim is based on the Company’s best estimate and is determined based on the total undiscounted lease liability offset by an estimate of the losses that affected landlords will be able to successfully mitigate. Accordingly, an expense of $42.9 million was recorded in Restructuring plan activities, net in the unaudited interim consolidated statement of income (loss). This provision is subject to significant estimation uncertainty, as proceedings are in a preliminary stage. Changes to the provision in future periods may be material and will be recorded through earnings.

The Company sent notices to terminate leases for an additional 82 of its stores in Canada on July 30, 2020 which were effective on August 29, 2020. The Company expects to record an additional gain on the modification of this lease liability of $16.6 million and an estimate for allowed claim in the amount of $18.0 million in the third quarter ending October 31, 2020. This estimate is based on the same assumptions used for the lease modifications recorded in the second quarter of 2020. The actual amount recorded in the third quarter of 2020 may differ as the Restructuring Plan proceedings evolve.

RESTRUCTURING PLAN ACTIVITIES, NET

6 Months Ended

Aug. 01, 2020

Note - 8 RESTRUCTURING PLAN ACTIVITIES, NET

	For the three months ended			For the six months ended
	August 1,			August 1,
	2020			2020
	$			$
Gain on modification of lease liabilities		(54,735	)		(54,735	)
Lease terminations		42,878			42,878
Impairment of property and equipment and right-of-use assets		—			37,400
Severance		5,168			5,168
Loss on disposal of property and equipment and right-of-use assets		1,542			1,542
Penalties and interest related to lease payable		1,001			1,001
Professional fees associated with our Restructuring Plan		974			974
Restructuring plan activities, net		(3,172	)		34,228

SHARE CAPITAL

6 Months Ended

Aug. 01, 2020

Note 9 - SHARE CAPITAL

Authorized

An unlimited number of common shares.

Issued and outstanding

	August 1,		February 1,
	2020		2020
	$		$
Share Capital - 26,208,129 Common shares (February 1, 2020 - 26,086,162)		113,119		112,843

During the three and six-month periods ended August 1, 2020, 4,000 stock options were exercised for common shares for cash proceeds of $3 [August 3, 2019 – nil].

In addition, during the three and six-month periods ended August 1, 2020, 104,652 and 117,967 common shares, respectively [August 3, 2019 – 9,603 and 48,968 common shares respectively] were issued in relation to the vesting of restricted stock units (“RSU”), resulting in an increase in share capital of $198 and $272, net of tax [August 3, 2019 — $52 and $273, net of tax, respectively] and a reduction in contributed surplus of $398 and $554, respectively [August 3, 2019 — $122 and $561, respectively].

Stock-based compensation

As at August 1, 2020, 1,042,285 [August 3, 2019, 1,650,733] common shares remain available for issuance under the 2015 Omnibus Plan.

No stock options were granted during the three and six-month periods ended August 1, 2020 and August 3, 2019.

A summary of the status of the Company’s stock option plan and changes during the six-month periods is presented below.

For the six months ended

August 1,

August 3,

2020

2019

Weighted

average

Options

exercise

Options

exercise

outstanding

price

outstanding

price

Outstanding, beginning of year

76,350

8.96

137,540

7.17

Issued

—

Exercised

(4,000

)

0.77

—

Forfeitures

—

(28,305

)

4.84

Outstanding, end of period

72,350

9.41

109,235

7.73

Exercisable, end of period

72,350

9.41

107,816

7.65

A summary of the status of the Company’s RSU plan and changes during the six-month periods is presented below.

For the six months ended

August 1,

August 3,

2020

2019

Weighted

average

RSUs

fair value

RSUs

fair value

outstanding

per unit (1)

outstanding

per unit (1)

Outstanding, beginning of year

749,522

2.17

270,976

5.26

Granted

1,177,222

1.44

804,710

1.93

Forfeitures

(275,162

)

1.66

(32,525

)

5.27

Vested

(117,967

)

2.22

(71,468

)

5.52

Vested, withheld for tax

(120,383

)

2.26

(50,331

)

5.72

Outstanding, end of period

1,413,232

1.65

921,362

2.30

_____________

(1)	Weighted average fair value per unit as at date of grant.

During the three and six-month periods ended August 1, 2020, the Company recognized a stock-based compensation expense of $267 and $580, respectively [August 3, 2019 — $143 and $270].

INCOME TAXES

6 Months Ended

Aug. 01, 2020

Note 10 - INCOME TAXES

Income tax expense is recognized based on management’s best estimate of the weighted average annual income tax rate expected for the full fiscal year.

A reconciliation of the statutory income tax rate to the effective tax rate is as follows:

	For the three months ended												For the six months ended
	August 1,						August 3,						August 1,						August 3,
	2020						2019						2020						2019
	%			$			%			$			%			$			%			$
Income tax recovery — statutory rate		26.8			699			26.8			(3,037	)		26.8			(11,572	)		26.8			(3,930	)
Non-deductible items		3.9			103			(0.4	)		43			(0.3	)		126			(0.5	)		76
Unrecognized deferred income tax assets		(30.7	)		(802	)		(26.4	)		2,994			(26.5	)		11,446			(26.3	)		3,854
Income tax provision (recovery) — effective tax rate		—			—			—			—			—			—			—			—

SELLING, GENERAL AND ADMINISTRATION EXPENSES

6 Months Ended

Aug. 01, 2020

Note 11 - SELLING, GENERAL AND ADMINISTRATION EXPENSES

	For the three months ended					For the six months ended
	August 1,			August 3,		August 1,			August 3,
	2020			2019		2020			2019
	$			$		$			$
Wages, salaries and employee benefits		3,270			14,792		12,663			31,309
Depreciation of property and equipment		301			1,359		1,544			2,684
Amortization of intangible assets		571			456		1,083			855
Amortization right-of-use asset		454			3,114		2,693			6,216
Marketing expenses		597			1,245		1,639			2,356
Stores supplies		311			815		1,076			1,625
Impairment of property and equipment and right-of-use assets		—			5,025		2,561			5,025
Stock-based compensation		267			143		580			270
Government wage subsidy		(1,156	)		—		(1,999	)		—
Other selling, general and administration		2,794			4,614		7,202			9,243
		7,409			31,563		29,042			59,583

EARNINGS PER SHARE

6 Months Ended

Aug. 01, 2020

Net income (loss) per share:

Note 12 - EARNINGS PER SHARE

Basic earnings per share (“EPS”) amounts are calculated by dividing the net income (loss) for the period attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the period. Diluted EPS amounts are calculated by dividing the net income (loss) attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares, unless these would be anti‑dilutive.

The following reflects the income and share data used in the basic and diluted EPS computations:

	For the three months ended					For the six months ended
	August 1,		August 3,			August 1,			August 3,
	2020		2019			2020			2019
	$		$			$			$
Net loss for basic EPS		2,609		(11,344	)		(43,178	)		(14,664	)
Weighted average number of shares outstanding:
Basic		26,128,971		26,056,520			26,108,499			26,038,128
Fully diluted		26,925,264		26,056,520			26,108,499			26,038,128
Net income (loss) per share:
Basic		0.10		(0.44	)		(1.65	)		(0.56	)
Fully diluted		0.10		(0.44	)		(1.65	)		(0.56	)

RELATED PARTY DISCLOSURES	6 Months Ended
RELATED PARTY DISCLOSURES	Aug. 01, 2020
RELATED PARTY DISCLOSURES
Note 13 - RELATED PARTY DISCLOSURES	Transactions with related parties are measured at the exchange amount, being the consideration established and agreed to by the related parties. During the three and six-month periods ended August 1, 2020, the Company purchased merchandise for resale amounting to $3 and $26, respectively [August 3, 2019 – nil and $15, respectively] and provided infrastructure and administrative services of $8 and $75, respectively [August 3, 2019 - $41 and $59, respectively] to a company controlled by one of its executive employees. The Company also spent $9 and $53, respectively [August 3, 2019 — $68 and $68, respectively] for consulting services from a related party of the principal shareholder. As well during the three-month period ended August 3, 2019, the Company purchased a perpetual license rights to a reporting data model and associated intellectual property for $200 from a related party of the principal shareholder. Loan to a Company controlled by one of the Company’s executive employees During the second quarter of 2019, the Company entered into a secured loan agreement with Oink Oink Candy Inc., doing business as “Squish”, as borrower, and Rainy Day Investments Ltd. (“RDI”), as guarantor, pursuant to which the Company agreed to lend to Squish an amount of up to $4 million, amended on September 13, 2019 to reflect a maximum amount available under the facility of $2 million. RDI guaranteed all of Squish’s obligations to the Company and, as security in full for the guarantee, gave a movable hypothec (or lien) in favor of the Company on its shares of the Company. Squish is a company controlled by Sarah Segal, an officer of the Company. RDI, the principal shareholder of the Company, is controlled by Herschel Segal, Executive Chairman, Interim Chief Executive Officer and a director of the Company. The Company and Squish previously entered into a Collaboration and Shared Services Agreement pursuant to which they collaborate on and share various services and infrastructure. During the first quarter of 2020, the loan of $2 million along with accrued interest of $45 were fully repaid.

SEGMENT INFORMATION

6 Months Ended

Aug. 01, 2020

SEGMENT INFORMATION

Note 14 - SEGMENT INFORMATION

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses. The Company has determined that each of its retail stores represents an operating segment. However, because its retail stores have similar economic characteristics, sell similar products, have similar types of customers, and use similar distribution channels, the Company has determined that these operating segments can be aggregated at a geographic level. The Company has concluded that it has two reportable segments, Canada and the U.S., that derive their revenues from the online, retail and wholesale sale of tea, tea accessories and food and beverages. The Company’s Chief Executive Officer (the chief operating decision maker or “CODM”) makes decisions about resources allocation and assesses performance at the country level, and for which discrete financial information is available.

The Company derives revenue from the following products:

For the three months ended

For the six months ended

August 1,

August 3,

August 1,

August 3,

2020

2019

2020

2019

Tea

19,921

29,306

46,016

62,730

Tea accessories

3,065

6,629

7,685

14,284

Food and beverages

3,232

1,572

6,418

23,031

39,167

55,273

83,432

Property and equipment, right-of-use assets and intangible assets by country are as follows:

	August 1,		February 1,
	2020		2020
	$		$
Canada		15,071		52,116
US		-		7,042
Total		15,071		59,158

Results from operating activities before corporate expenses per country are as follows:

For the three months

ended August 1, 2020

For the six months

ended August 1, 2020

Canada

Consolidated

Canada

Consolidated

Sales

16,951

6,080

23,031

40,996

14,277

55,273

Cost of sales

11,469

3,225

14,694

24,851

7,412

32,263

Gross profit

5,482

2,855

8,337

16,145

6,865

23,010

Selling, general and administration expenses (allocated)

1,975

949

2,924

11,507

3,540

15,047

Impairment of property and equipment and right-of-use assets

—

2,561

—

2,561

Results from operating activities before corporate expenses

3,507

1,906

5,413

2,077

3,325

5,402

Selling, general and administration expenses (non-allocated)

4,485

11,434

Restructuring plan activities, net

(3,172

)

34,228

Results from operating activities

4,100

(40,260

)

Finance costs

1,559

3,226

Finance income

(68

)

(308

)

Net Income (loss) before income taxes

2,609

(43,178

)

	For the three months ended August 3, 2019									For the six months ended August 3, 2019
	Canada			US			Consolidated			Canada		US			Consolidated
	$			$			$			$		$			$
Sales		30,340			8,827			39,167			64,530		18,902			83,432
Cost of sales		13,925			3,437			17,362			28,039		7,252			35,291
Gross profit		16,415			5,390			21,805			36,491		11,650			48,141
Selling, general and administration expenses (allocated)		14,697			4,462			19,159			29,573		9,277			38,850
Impairment of property and equipment and right-of-use assets		2,480			2,545			5,025			2,480		2,545			5,025
Results from operating activities before corporate expenses		(762	)		(1,617	)		(2,379	)		4,438		(172	)		4,266
Selling, general and administration expenses (non-allocated)								7,378								15,708
Results from operating activities								(9,758	)							(11,442	)
Finance costs								1,781								3,608
Finance income								(195	)							(386	)
Net Loss before income taxes								(11,344	)							(14,664	)

FINANCIAL RISK MANAGEMENT

6 Months Ended

Aug. 01, 2020

FINANCIAL RISK MANAGEMENT

Note 15 - FINANCIAL RISK MANAGEMENT

The Company’s activities expose it to a variety of financial risks, including risks related to foreign exchange, interest rate, liquidity and credit.

Currency Risk — Foreign Exchange Risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Given that some of its purchases are denominated in U.S. dollars, the Company is exposed to foreign exchange risk. The Company’s foreign exchange risk is largely limited to currency fluctuations between the Canadian and U.S. dollars. The Company is exposed to currency risk through its cash, accounts receivable and accounts payable denominated in U.S. dollars.

Assuming that all other variables remain constant, a revaluation of these monetary assets and liabilities due to a 5% rise or fall in the Canadian dollar against the U.S. dollar would have resulted in an increase or decrease to net income (loss) in the amount of $155.

The Company’s foreign exchange exposure is as follows:

	August 1,		February 1,
	2020		2020
	US$		US$
Cash		356		1,928
Accounts receivable		1,953		778
Accounts payable		5,406		6,090

The Company’s U.S. subsidiary’s transactions are denominated in U.S. dollars.

The Company had no foreign exchange contracts outstanding as at August 1, 2020.

Market Risk — Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Financial instruments that potentially subject the Company to cash flow interest rate risk include financial assets and liabilities with variable interest rates and consist primarily of cash on hand.

Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. On July 8, 2020, the Company announced it was implementing the Restructuring Plan in order to stabilize its operations and eventually generate free cash-flow to sustain the business. Considering the Company does not have access to financing and needs to operate the business and fund its restructuring activities, the Company’s approach to managing liquidity risk is to ensure, to the extent possible, that it will have sufficient liquidity to meet liabilities as they become due. The Company’s liquidity follows a seasonal pattern based on the timing of inventory purchases and capital expenditures. The Company is exposed to this risk mainly in respect of its trade and other payables, lease and purchase obligations.

As at August 1, 2020, the Company had $34.3 million in cash.

The Company expects to finance its working capital needs and investments in infrastructure through cash flows from operations and cash on hand. At August 1, 2020, Trade and other payables amounted to $26.6 million (February 1, 2020 - $20.8 million), Provisions amounted to $47.8 million and purchase obligations amounted to $6.6 million (February 1, 2020 - $11.5 million).As part of its Restructuring Plan, Trade and other payables due as at July 8, 2020 are subject to a plan of arrangement to be proposed by the Company to its creditors as part of the CCAA proceedings. All trade and other payables from July 9, 2020 onwards are expected to be paid according to negotiated vendor terms.

Refer to note 2 for details with respect to the going concern uncertainty.

Credit Risk

The Company is exposed to credit risk resulting from the possibility that counterparties may default on their financial obligations to the Company. The Company’s maximum exposure to credit risk at the reporting date is equal to the carrying value of receivables. Accounts receivable primarily consist of receivables from retail customers who pay by credit card, receivables from wholesale channel sales, recoveries of credits from suppliers for returned or damaged products, and receivables from other companies for sales of products, gift cards and other services. Credit card payments have minimal credit risk and the limited number of corporate receivables is closely monitored. As a result, expected credit loss on these financial assets is not significant.

INVENTORIES (Tables)

6 Months Ended

Aug. 01, 2020

INVENTORIES (Tables)

Schedule of Inventory

	August 1,		February 1,
	2020		2020
	$		$
Finished goods		20,018		18,590
Goods in transit		2,628		2,059
Packaging		1,708		1,714
		24,354		22,363

RESTRUCTURING PLAN (Tables)

6 Months Ended

Aug. 01, 2020

INVENTORIES (Tables)

Schedule of provisions

	As at
	August 1,
	2020
	$
Lease termination		42,878
Severance		4,940
Provisions		47,818

RESTRUCTURING PLAN ACTIVITIES, NET (Tables)

6 Months Ended

Aug. 01, 2020

INVENTORIES (Tables)

Schedule of Restructuring plan activities, net

	For the three months ended			For the six months ended
	August 1,			August 1,
	2020			2020
	$			$
Gain on modification of lease liabilities		(54,735	)		(54,735	)
Lease terminations		42,878			42,878
Impairment of property and equipment and right-of-use assets		—			37,400
Severance		5,168			5,168
Loss on disposal of property and equipment and right-of-use assets		1,542			1,542
Penalties and interest related to lease payable		1,001			1,001
Professional fees associated with our Restructuring Plan		974			974
Restructuring plan activities, net		(3,172	)		34,228

SHARE CAPITAL (Tables)

6 Months Ended

Aug. 01, 2020

SHARE CAPITAL (Tables)

Summary of authorized, issued, and outstanding shares

	August 1,		February 1,
	2020		2020
	$		$
Share Capital - 26,208,129 Common shares (February 1, 2020 - 26,086,162)		113,119		112,843

Summary of stock option plan and periodic changes

For the six months ended

August 1,

August 3,

2020

2019

Weighted

average

Options

exercise

Options

exercise

outstanding

price

outstanding

price

Outstanding, beginning of year

76,350

8.96

137,540

7.17

Issued

—

Exercised

(4,000

)

0.77

—

Forfeitures

—

(28,305

)

4.84

Outstanding, end of period

72,350

9.41

109,235

7.73

Exercisable, end of period

72,350

9.41

107,816

7.65

A summary of the status of the Company’s RSU plan and changes during the six-month periods is presented below.

For the six months ended

August 1,

August 3,

2020

2019

Weighted

average

RSUs

fair value

RSUs

fair value

outstanding

per unit (1)

outstanding

per unit (1)

Outstanding, beginning of year

749,522

2.17

270,976

5.26

Granted

1,177,222

1.44

804,710

1.93

Forfeitures

(275,162

)

1.66

(32,525

)

5.27

Vested

(117,967

)

2.22

(71,468

)

5.52

Vested, withheld for tax

(120,383

)

2.26

(50,331

)

5.72

Outstanding, end of period

1,413,232

1.65

921,362

2.30

INCOME TAXES (Tables)

6 Months Ended

Aug. 01, 2020

INCOME TAXES (Tables)

Schedule of the reconciliation of the statutory income tax rate to the effective tax rate

	For the three months ended												For the six months ended
	August 1,						August 3,						August 1,						August 3,
	2020						2019						2020						2019
	%			$			%			$			%			$			%			$
Income tax recovery — statutory rate		26.8			699			26.8			(3,037	)		26.8			(11,572	)		26.8			(3,930	)
Non-deductible items		3.9			103			(0.4	)		43			(0.3	)		126			(0.5	)		76
Unrecognized deferred income tax assets		(30.7	)		(802	)		(26.4	)		2,994			(26.5	)		11,446			(26.3	)		3,854
Income tax provision (recovery) — effective tax rate		—			—			—			—			—			—			—			—

SELLING GENERAL AND ADMINISTRATION EXPENSES (Tables)

6 Months Ended

Aug. 01, 2020

SELLING GENERAL AND ADMINISTRATION EXPENSES (Tables)

Schedule of selling, general and administrative expenses

	For the three months ended					For the six months ended
	August 1,			August 3,		August 1,			August 3,
	2020			2019		2020			2019
	$			$		$			$
Wages, salaries and employee benefits		3,270			14,792		12,663			31,309
Depreciation of property and equipment		301			1,359		1,544			2,684
Amortization of intangible assets		571			456		1,083			855
Amortization right-of-use asset		454			3,114		2,693			6,216
Marketing expenses		597			1,245		1,639			2,356
Stores supplies		311			815		1,076			1,625
Impairment of property and equipment and right-of-use assets		—			5,025		2,561			5,025
Stock-based compensation		267			143		580			270
Government wage subsidy		(1,156	)		—		(1,999	)		—
Other selling, general and administration		2,794			4,614		7,202			9,243
		7,409			31,563		29,042			59,583

EARNINGS PER SHARE (Tables)

6 Months Ended

Aug. 01, 2020

Net income (loss) per share:

Schedule of reconciliation of basic and diluted EPS

	For the three months ended					For the six months ended
	August 1,		August 3,			August 1,			August 3,
	2020		2019			2020			2019
	$		$			$			$
Net loss for basic EPS		2,609		(11,344	)		(43,178	)		(14,664	)
Weighted average number of shares outstanding:
Basic		26,128,971		26,056,520			26,108,499			26,038,128
Fully diluted		26,925,264		26,056,520			26,108,499			26,038,128
Net income (loss) per share:
Basic		0.10		(0.44	)		(1.65	)		(0.56	)
Fully diluted		0.10		(0.44	)		(1.65	)		(0.56	)

SEGMENT INFORMATION (Tables)

6 Months Ended

Aug. 01, 2020

SEGMENT INFORMATION

Schedule of revenue by product

For the three months ended

For the six months ended

August 1,

August 3,

August 1,

August 3,

2020

2019

2020

2019

Tea

19,921

29,306

46,016

62,730

Tea accessories

3,065

6,629

7,685

14,284

Food and beverages

3,232

1,572

6,418

23,031

39,167

55,273

83,432

Schedule of gross profit per country

	August 1,		February 1,
	2020		2020
	$		$
Canada		15,071		52,116
US		-		7,042
Total		15,071		59,158

Schedule of property and equipment and intangible assets by country

For the three months

ended August 1, 2020

For the six months

ended August 1, 2020

Canada

Consolidated

Canada

Consolidated

Sales

16,951

6,080

23,031

40,996

14,277

55,273

Cost of sales

11,469

3,225

14,694

24,851

7,412

32,263

Gross profit

5,482

2,855

8,337

16,145

6,865

23,010

Selling, general and administration expenses (allocated)

1,975

949

2,924

11,507

3,540

15,047

Impairment of property and equipment and right-of-use assets

—

2,561

—

2,561

Results from operating activities before corporate expenses

3,507

1,906

5,413

2,077

3,325

5,402

Selling, general and administration expenses (non-allocated)

4,485

11,434

Restructuring plan activities, net

(3,172

)

34,228

Results from operating activities

4,100

(40,260

)

Finance costs

1,559

3,226

Finance income

(68

)

(308

)

Net Income (loss) before income taxes

2,609

(43,178

)

	For the three months ended August 3, 2019									For the six months ended August 3, 2019
	Canada			US			Consolidated			Canada		US			Consolidated
	$			$			$			$		$			$
Sales		30,340			8,827			39,167			64,530		18,902			83,432
Cost of sales		13,925			3,437			17,362			28,039		7,252			35,291
Gross profit		16,415			5,390			21,805			36,491		11,650			48,141
Selling, general and administration expenses (allocated)		14,697			4,462			19,159			29,573		9,277			38,850
Impairment of property and equipment and right-of-use assets		2,480			2,545			5,025			2,480		2,545			5,025
Results from operating activities before corporate expenses		(762	)		(1,617	)		(2,379	)		4,438		(172	)		4,266
Selling, general and administration expenses (non-allocated)								7,378								15,708
Results from operating activities								(9,758	)							(11,442	)
Finance costs								1,781								3,608
Finance income								(195	)							(386	)
Net Loss before income taxes								(11,344	)							(14,664	)

FINANCIAL RISK MANAGEMENT (Tables)

6 Months Ended

Aug. 01, 2020

FINANCIAL RISK MANAGEMENT

Summary of foreign exchange exposure

	August 1,		February 1,
	2020		2020
	US$		US$
Cash		356		1,928
Accounts receivable		1,953		778
Accounts payable		5,406		6,090

CORPORATE INFORMATION (Details Narrative) - CAD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 01, 2020	Aug. 03, 2019	Aug. 01, 2020	Aug. 01, 2020	Aug. 03, 2019
Statement [Line Items]
Selling, general and administrative expenses	$ 7,409	$ 31,563		$ 29,042	$ 59,583
Canada Emergency Wage Subsidy [Member]
Statement [Line Items]
Selling, general and administrative expenses	$ 800		$ 1,200

BASIS OF PREPARATION and GOING CONCERN UNCERTAINTY (Details Narrative) - Canada Emergency Wage Subsidy [Member] $ in Thousands	3 Months Ended	6 Months Ended
	Aug. 01, 2020 CAD ($)	Aug. 01, 2020 CAD ($)
Statement [Line Items]
Total current liabilities	$ 86,600	$ 86,600
Cash held and accounts other receivables		41,000
Net Income (loss)	$ 2,600	$ (43,200)

SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONSY (Details Narrative) $ in Thousands	6 Months Ended
	Aug. 01, 2020 CAD ($)
Claim amount	$ 42,900
Expense	$ 42,900

INVENTORIES (Details) - CAD ($) $ in Thousands	Aug. 01, 2020	Feb. 01, 2020
Finished goods	$ 20,018	$ 18,590
Goods in transit	2,628	2,059
Packaging	1,708	1,714
Total	$ 24,354	$ 22,363

INVENTORIES (Details Narrative) - CAD ($) $ in Thousands	3 Months Ended		6 Months Ended
INVENTORIES (Details Narrative) - CAD ($) $ in Thousands	Aug. 01, 2020	Aug. 03, 2019	Aug. 01, 2020	Aug. 03, 2019
Inventories recognized	$ 6,104	$ 11,623	$ 14,760	$ 23,617
Inventory includes write-down	$ 0	$ 493	$ 560	$ 493

PROPERTY AND EQUIPMENT AND RIGHT OF USE ASSETS (Details Narrative) $ in Thousands	3 Months Ended				6 Months Ended
	Aug. 01, 2020 CAD ($)	Aug. 01, 2020 USD ($)	Aug. 03, 2019 CAD ($)	May 04, 2019 CAD ($)	Aug. 01, 2020 CAD ($)	Aug. 03, 2019 CAD ($)
Statement [Line Items]
Impairment loss of property and equipment		$ 0	$ 0	$ 0	$ 27,000	$ 0
Impairment loss	$ 13,000		$ 0
Pre-tax weighted average cost of capital rate	13.00%		11.90%		13.00%	11.90%
Impairment loss reversed					$ 12,800
Depreciation for the right of use assets	$ 454		$ 3,114		2,693	$ 6,216
Depreciation of property and equipment			1,359		1,544	2,684
Value in use	$ 791		$ 3,924		791	3,924
Corporate selling, general and administration expenses					305	257
Impairment loss related to right of use assets				$ 0	0	5,000
Remaing impairment loss					200
Canada Segment [Member]
Statement [Line Items]
Depreciation for the right of use assets					2,416	5,059
Depreciation of property and equipment					1,186	2,318
United States Segment [Member]
Statement [Line Items]
Depreciation for the right of use assets					277	1,157
Depreciation of property and equipment					358	$ 366
7 of the 18 stores [member]
Statement [Line Items]
Impairment loss related to right of use assets					2,400
206 stores [member]
Statement [Line Items]
Impairment loss related to right of use assets					$ 24,600

RESTRUCTURING PLAN (Details) $ in Thousands	Aug. 01, 2020 CAD ($)
Statement [Line Items]
Lease termination	$ 16,600
Provisions [Member]
Statement [Line Items]
Lease termination	42,878
Severance	4,940
Provisions	$ 47,818

RESTRUCTURING PLAN (Details Narrative) - CAD ($) $ in Thousands	6 Months Ended	9 Months Ended
	Aug. 01, 2020	Oct. 31, 2020
Provision of lease terminations	$ 68,000
Allowed claim	42,900	$ 18,000
Lease liability	$ 16,600

RESTRUCTURING PLAN ACTIVITIES, NET (Details) - CAD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Aug. 01, 2020	Aug. 01, 2020
Gain on modification of lease liabilities	$ (54,735)	$ (54,735)
Lease terminations	42,878	42,878
Impairment of property and equipment and right-of-use assets	0	37,400
Severance	5,168	5,168
Loss on disposal of property and equipment and right-of-use assets	1,542	1,542
Penalties and interest related to lease payable	1,001	1,001
Professional fees associated with our Restructuring Plan	974	974
Restructuring plan activities, net	$ (3,172)	$ 34,228

SHARE CAPITAL (Details) - CAD ($) $ in Thousands	Aug. 01, 2020	Feb. 01, 2020
SHARE CAPITAL (Tables)
Share capital	$ 113,119	$ 112,843

SHARE CAPITAL (Details 1) - $ / shares	6 Months Ended
SHARE CAPITAL (Details 1) - $ / shares	Aug. 01, 2020	Aug. 03, 2019
Options outstanding
Outstanding, beginning of year	76,350	137,540
Issued	0	0
Exercised	(4,000)	0
Forfeitures	0	(28,305)
Outstanding, end of period	72,350	109,235
Exercisable, end of period	72,350	107,816
Weighted average exercise price
Weighted average exercise price, beginning	$ 8.96	$ 7.17
Issued	0	0
Exercised	0.77	0
Forfeitures (in dollars per share)	0	4.84
Weighted average exercise price, ending	9.41	7.73
Weighted average exercise price, exercisable	$ 9.41	$ 7.65

SHARE CAPITAL (Details 2) - $ / shares	6 Months Ended
SHARE CAPITAL (Details 2) - $ / shares	Aug. 01, 2020	Aug. 03, 2019
RSUs outstanding
Outstanding, beginning of year	749,522	270,976
Granted	1,177,222	804,710
Forfeitures	(275,162)	(32,525)
Vested	(117,967)	(71,468)
Vested, withheld for tax	(120,383)	(50,331)
Outstanding, end of year	1,413,232	921,362
Weighted average fair value per unit
Outstanding, beginning of year	$ 2.17	$ 5.26
Granted	1.44	1.93
Forfeitures	1.66	5.27
Vested	2.22	5.52
Vested, withheld for tax	2.26	5.72
Outstanding, end of year	$ 1.65	$ 2.30

SHARE CAPITAL (Details Narrative) - CAD ($) $ in Thousands	3 Months Ended		6 Months Ended
SHARE CAPITAL (Details Narrative) - CAD ($) $ in Thousands	Aug. 01, 2020	Aug. 03, 2019	Aug. 01, 2020	Aug. 03, 2019
Statement [Line Items]
Stock-based compensation expense	$ 267	$ 143	$ 580	$ 270
Vested (in shares)	(104,652)	9,603	(117,967)	48,968
Stock options exercised, shares			4,000
Proceeds from stock options exercised			$ 3	$ 0
Restricted Stock Units Rsus [Member]
Statement [Line Items]
Common shares issued on vesting of restricted stock units	$ 198	$ 52	272	273
Options [member]
Statement [Line Items]
Reduction in the contributed surplus	$ 398	$ 122	$ 554	$ 561
2015 Omnibus Plan [Member]
Statement [Line Items]
Maximum number of shares available for issuance	1,042,285	1,650,733

INCOME TAXES (Details) - CAD ($) $ in Thousands	3 Months Ended		6 Months Ended
INCOME TAXES (Details) - CAD ($) $ in Thousands	Aug. 01, 2020	Aug. 03, 2019	Aug. 01, 2020	Aug. 03, 2019
INCOME TAXES (Tables)
Income tax recovery - statutory rate (as a percent)	26.80%	26.80%	26.80%	26.80%
Income tax provision - statutory rate	$ 699	$ (3,037)	$ (11,572)	$ (3,930)
Non-deductible items (as a percent)	3.90%	(0.40%)	(0.30%)	(0.50%)
Unrecognized deferred income tax asset (as a percent)	(30.70%)	(26.40%)	(26.50%)	(26.30%)
Income tax provision (recovery) - effective tax rate	$ 0	$ 0	$ 0	$ 0
Income tax provision (recovery) - effective tax rate (as a percent)	0.00%	0.00%	0.00%	0.00%
Non-deductible items	$ 103	$ 43	$ 126	$ 76
Unrecognized deferred income tax asset	$ (802)	$ 2,994	$ 11,446	$ 3,854

SELLING GENERAL AND ADMINISTRATION EXPENSES (Details) - CAD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 01, 2020	Aug. 03, 2019	Aug. 01, 2020	Aug. 03, 2019
SELLING GENERAL AND ADMINISTRATION EXPENSES (Tables)
Wages, salaries and employee benefits	$ 3,270	$ 14,792	$ 12,663	$ 31,309
Depreciation of property and equipment	301	1,359	1,544	2,684
Amortization of intangible assets	571	456	1,083	855
Amortization right-of-use asset	454	3,114	2,693	6,216
Marketing Expenses	597	1,245	1,639	2,356
Stores Supplies	311	815	1,076	1,625
Impairment of property, equipment and right-of-use assets	0	5,025	2,561	5,025
Stock-based compensation	267	143	580	270
Government wage subsidy	(1,156)	0	(1,999)	0
Other selling, general and administration	2,794	4,614	7,202	9,243
Selling, general and administrative expense	$ 7,409	$ 31,563	$ 29,042	$ 59,583

EARNINGS PER SHARE (Details) - CAD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 01, 2020	Aug. 03, 2019	Aug. 01, 2020	Aug. 03, 2019
Net income (loss) per share:
Net loss for basic EPS	$ 2,609	$ (11,344)	$ (43,178)	$ (14,664)
Basic	26,128,971	26,056,520	26,108,499	26,038,128
Fully diluted	26,925,264	26,056,520	26,108,499	26,038,128
Net loss per share:
Basic	$ 0.10	$ (0.44)	$ (1.65)	$ (0.56)
Fully diluted	$ 0.10	$ (0.44)	$ (1.65)	$ (0.56)

RELATED PARTY DISCLOSURES (Details Narrative) - CAD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 01, 2020	Aug. 03, 2019	Aug. 01, 2020	Aug. 03, 2019
Statement [Line Items]
Merchandise purchased from related party	$ 3	$ 0	$ 26	$ 15
Infrastructure and administrative services	8	41	75	59
Perpetual license right		200
Consulting services	9	$ 68	$ 53	$ 68
Revolving loan interest rate description			The Company agreed to lend to Squish an amount of up to $4 million, amended on September 13, 2019 to reflect a maximum amount available under the facility of $2 million.
Squish [Member]
Statement [Line Items]
Secured loan agreement amount			$ 4,000
Accrued interest	45
Loan amount repaid	$ 2,000		$ 2,000

SEGMENT INFORMATION (Details) - CAD ($) $ in Thousands	3 Months Ended				6 Months Ended
SEGMENT INFORMATION (Details) - CAD ($) $ in Thousands	Aug. 03, 2020	Aug. 01, 2020	Aug. 03, 2019	Aug. 03, 2019	Aug. 01, 2020	Aug. 01, 2020	Aug. 03, 2019	Aug. 03, 2019
Statement [Line Items]
Sales	$ 23,031	$ 23,031	$ 39,167	$ 39,167	$ 55,273	$ 55,273	$ 83,432	$ 83,432
Tea [Member]
Statement [Line Items]
Sales	19,921			29,306	46,016			62,730
Tea Accessories [Member]
Statement [Line Items]
Sales	3,065			6,629	7,685			14,284
Food And Beverages [Member]
Statement [Line Items]
Sales	$ 45			$ 3,232	$ 1,572			$ 6,418

SEGMENT INFORMATION (Details 1) - CAD ($) $ in Thousands	Aug. 01, 2020	Feb. 01, 2020
Statement [Line Items]
Property and equipment and intangible assets	$ 15,071	$ 59,158
Canada Segment [Member]
Statement [Line Items]
Property and equipment and intangible assets	15,071	52,116
United States Segment [Member]
Statement [Line Items]
Property and equipment and intangible assets	$ 0	$ 7,042

SEGMENT INFORMATION (Details 2) - CAD ($) $ in Thousands	3 Months Ended		6 Months Ended
SEGMENT INFORMATION (Details 2) - CAD ($) $ in Thousands	Aug. 01, 2020	Aug. 03, 2019	Aug. 01, 2020	Aug. 03, 2019
Statement [Line Items]
Sales	$ 23,031	$ 39,167	$ 55,273	$ 83,432
Cost of sales	14,694	17,362	32,263	35,291
Gross profit	8,337	21,805	23,010	48,141
Selling, general and administration expenses (allocated)	2,924	19,159	15,047	38,850
Impairment of property, equipment and right-of-use assets	0	5,025	2,561	5,025
Results from operating activities before corporate expenses	5,413	(2,379)	5,402	4,266
Selling, general and administration expenses (non-allocated)	4,485	7,378	11,434	15,708
Restructuring plan activities, net	(3,172)		34,228
Results from operating activities	4,100	(9,758)	(40,260)	(11,442)
Finance costs	1,559	1,781	3,226	3,608
Finance income	(68)	(195)	(308)	(386)
Net Income (loss) before income taxes	2,609	(11,344)	(43,178)	(14,664)
Operating Segments [Member] \| Canada Segment [Member]
Statement [Line Items]
Sales	16,951	30,340	40,996	64,530
Cost of sales	11,469	13,925	24,851	28,039
Gross profit	5,482	16,415	16,145	36,491
Selling, general and administration expenses (allocated)	1,975	14,697	11,507	29,573
Impairment of property, equipment and right-of-use assets	0	2,480	2,561	2,480
Results from operating activities before corporate expenses	3,507	(762)	2,077	4,438
Operating Segments [Member] \| United States Segment [Member]
Statement [Line Items]
Sales	6,080	8,827	14,277	18,902
Cost of sales	3,225	3,437	7,412	7,252
Gross profit	2,855	5,390	6,865	11,650
Selling, general and administration expenses (allocated)	949	4,462	3,540	9,277
Impairment of property, equipment and right-of-use assets	0	2,545	0	2,545
Results from operating activities before corporate expenses	$ 1,906	$ (1,617)	$ 3,325	$ (172)

FINANCIAL RISK MANAGEMENT (Details) - Currency Risk - Foreign Exchange Risk [Member] - CAD ($) $ in Thousands	Aug. 01, 2020	Feb. 01, 2020
Statement [Line Items]
Foreign exchange exposure, cash	$ 356	$ 1,928
Foreign exchange exposure, accounts receivable	1,953	778
Foreign exchange exposure, accounts payable	$ 5,406	$ 6,090

FINANCIAL RISK MANAGEMENT (Details Narrative) - CAD ($) $ in Thousands	6 Months Ended
	Aug. 01, 2020	Feb. 01, 2020
Statement [Line Items]
Cash	$ 34,300
Trade and other payables	26,600	$ 20,800
Purchase obligations	6,600	$ 11,500
Provisions amounted	47,800
Currency Risk - Foreign Exchange Risk [Member]
Statement [Line Items]
Increase (decrease) in net loss due to change in exchange rate	$ 155