MONTREAL - DavidsTea Inc. (DTEA:UN) says it is lending candy retailer Squish up to $2 million even though the beverage company continued to lose money in the second quarter.

Squish, whose parent company is Oink Oink Candy Inc., is operated by the daughter of DavidsTea founder and interim CEO Hershel Segal.

His investment firm has guaranteed the loan. The two companies have previously entered into a collaboration agreement.

Montreal-based DavidsTea says it lost $7 million for the three months ended Aug. 3, improved from a $10-million net loss a year earlier.

Excluding one-time items, the adjusted loss was $7 million or 27 cents per share, compared with $3.3 million or 13 cents per share in the second quarter of 2018.

Revenues decreased 2.5 per cent to $39.2 million despite gains in its e-commerce and wholesale channels.

Retail sales declined to $3.8 million as same-store sales fell 9.4 per cent. E-commerce and sales to grocers increased $2.8 million or 52.8 per cent.

DavidsTea operates a network of more than 230 stores in Canada and the United States.