David’s Bridal LLC filed for bankruptcy for the second time. The retailer could close all of its nearly 300 stores if the company is unable to find a buyer in the coming weeks.
The company filed for Chapter 11 protection in New Jersey, unable to tame its debt despite a surge in weddings following COVID-19 restrictions and moves to expand into more affordable dresses. David’s listed its assets and liabilities of $100 million to $500 million in its bankruptcy petition.
David’s Bridal ranks No. 475 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers by web sales.
Avoiding scaring off customers
Attempts to grow an ecommerce business weren’t enough to save David’s. Under CEO Jim Marcum, who came to the company from Apollo Global Management, the retailer began selling quinceañera dresses. In 2021, David’s launched a virtual wedding stylist program, and in 2022, the retailer launched shoppable content on TikTok.
David’s said its stores are open and the company will continue fulfilling all customer orders “without disruption or delay.” The company has 100,000 finished dresses in or on their way to stores, Marcum said in court on April 17. Another 30,000 dresses have been ordered and are being made, he said.
The company needs to reassure brides that their dresses will be delivered, Marcum said. If not, customers may cancel and demand their money back, he said.
“I’m worried about a run on the bank, to put it very bluntly,” he told U.S. Bankruptcy Judge Christine M. Gravelle.
The company may close its stores if it can’t quickly find a buyer for the whole business, according to court papers. If no buyer steps forward, David’s plans to wind down its operations by the end of July, though the company cautioned that plans could change.
The company won court approval on April 17 to borrow as much as $85 million to keep operating while in bankruptcy. Gravelle also gave the company permission to pay its dressmaker $5.5 million to ensure customers get the bridal gowns they ordered.
“A lot of brides out there are nervous,” Gravelle said.
David’s Bridal has declared bankruptcy before
David’s is in bankruptcy again following a quick trip through Chapter 11 that ended in January 2019. The company continued operating while paring more than $400 million of debt and handing control to a group of lenders. But the retailer continued to struggle as brides, spooked by the bankruptcy, turned to alternative options.
Later in 2019, David’s restructured its debts again in an out-of-court deal. The pandemic caused further upheaval when COVID-19 restrictions forced its stores to close temporarily and brides postponed weddings or held smaller ceremonies.
Conshohocken, Pennsylvania-based David’s joins a handful of large retail chains that have filed Chapter 11 this year including bedding manufacturer Serta Simmons LLC (No. 707) and Party City Holdco Inc. (No. 321).
The company employs about 10,000 people, 2,000 of whom are full-time workers, according to court papers.
The case is David’s Bridal LLC, 23-13131, US Bankruptcy Court for the District of New Jersey (Trenton).
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