David’s Bridal is prepping for a sale of the company but another tour in bankruptcy court can’t be ruled out.
The bridal retailer is expected to file for a second go at Chapter 11 proceedings, the so-called Chapter 22, sooner than later. It’s last filing was five years ago, in November 2018.
There is also talk that the filing could coincide with an announcement that the company will be sold. The firm has been in talks with bankers over its strategic options. A bankruptcy filing could help it eliminate unwanted leases, as well as other obligations that a buyer might not want to take on. The chain operates more than 300 stores across the U.S., as well as some locations in Mexico and. Canada.
In a WARN (Worker Adjustment and Retraining Notification) Act filing in Pennsylvania, the wedding gown retailer said it would lay off 9,236 employees across the country.
Based in Conshohocken, Penn., the company was founded 73 years ago and has about 11,500 employees. In addition to wedding gowns, it sells bridesmaid dresses, prom gowns and other formal dresses and accessories.
“We are evaluating our strategic options and a sale process is underway. At this time, there are no updates to share,” Laura McKeever, David’s Bridal’s senior manager, brand pr, philanthropy and communications, said. “As ever, providing excellent service remains our focus and we are committed to serving and delivering for our brides and customers and being part of magical moments.”
When the retailer filed its pre-packaged Chapter 11 in 2018, it suffered under a heavy debt load from a $1.05 billion leveraged buyout in 2012 by private equity firms Clayton Dubilier & Rice and Leonard Green & Partners. The filing was to help it whittle away more than $400 million in debt. It worked out a deal with lenders to shed $450 million, who eventually became its new owners. The retailer was able to pay trade vendor claims in full as part of its reorganization plan.
David’s Bridal exited bankruptcy in January 2019 after just two months, a move that helped it keep its customer base and business relatively intact.
But even at its exit, there were questions over whether enough was done while it was under court supervision. The company said it didn’t need to close stores because they were profitable. But it still had more than $700 million in debt on its books—and then the pandemic hit.
The retailer managed to stay afloat even as most social events were shut down. It benefited from some upside when local economies began opening up and people were able to plan social activities again.
The company has been working on new offerings for spring, including an eco-minded collection made form recycled fabrics under the tagline Reimagine by DB Studio. The line ranges from $299 to $599, which is at the lower end of price points for wedding gowns as well as being more attuned to price-conscious brides as consumers have been pulling back on spending due to inflationary pressures.