NEW YORK (TheStreet) -- Canada-based loose tea retailer DAVIDsTEA (DTEA) debuted on the Nasdaq Friday with a strong first day of trading. The shares priced Thursday night at $19, above the previously estimated range of $17 to $18, and opened on Friday at $25.01. The company originally planned to price the 5.1 million share offering at $14 to $16. The shares closed at $27.
DAVIDsTEA offers a selection of proprietary tea blends, pre-packaged teas and tea-related gifts and accessories at its 160 stores. It has 25 outlets in the U.S., in the key cities of New York, Boston, Chicago and San Francisco. CEO Sylvain Toutant say the company plans to opening another 25 to 30 stores in Canada, and 10 to 15 in the U.S., clustered around markets where the company already does business.
In 2014, Americans drank more than 80 billion servings of tea, in excess of 3.6 billion gallons. Approximately four in five consumers drink tea, with millennials being the most likely to, according to TeaUSA.com. Toutant says her company will be competitive with brands like Starbucks (SBUX) and Teavana, but notes that its model is quite different from theirs. The DAVIDsTEA "take" on tea is very young and millennial-driven, with stores that are bright and fun, with a focus on making quality tea accessible for everyone. Another focus: Raising brand awareness. Toutant says social media has been deeply embedded in DAVIDsTEA's marketing strategy, as well as grassroots media, events in multiple cities, and its e-commerce platform.
DAVIDsTEA made the decision to go public now in an effort to fuel growth and push expansion plans. According to the company's filing with the SEC, it is targeting U.S. store openings, with the idea that U.S. stores will comprise 25% to 35% of the companies retail base within five years. Proceeds from the IPO will be used to fully repay a shareholder loan and for working capital.