David’s Bridal Inc., America’s largest wedding gown retailer, emerged from bankruptcy on Friday, just weeks after it first sought protection from creditors.
David’s Bridal shrank its debt load by about $450 million and is now owned by lenders including Oaktree Capital Group. The company, which filed for bankruptcy in November, was looking to exit bankruptcy quickly to avoid scaring off brides who might fear that a store under court protection from creditors was at risk of collapsing and could destroy wedding plans in the process.
Customers tend to associate the word “bankruptcy” with a company’s liquidating and going away, not with its reducing debt while continuing to operate, Chief Executive Scott Key said. “It’s important to maintain trust” with customers and employees that are involved with weddings, a time when brides are often spending heavily and don’t want plans to be foiled. David’s competitor Alfred Angelo abruptly closed its doors in 2017, leaving brides stranded as orders went unfulfilled.
January is a crucial time for David’s Bridal and similar companies, as people who get engaged over the holidays turn into wedding dress buyers. Cutting debt “frees our ability to re-invest in the customer experience, our stores and digital experience,” Key said. “It puts us in a position of strength.” The company recently acquired Blueprint Registry, an online registry system, and is expanding its dress sizes to accommodate more customers.
Based in the Philadelphia suburb of Conshohocken, David’s Bridal is one in a procession of retailers to file for Chapter 11 court protection after struggling with heavy debt loads. This week children’s clothing chain Gymboree filed to liquidate in bankruptcy, less than two years after it reorganized in bankruptcy.
What’s more, U.S. marriage rates have fallen since the 1980s, and although the amount Americans typically spend on weddings has risen, the industry has been thrown into chaos by intense competition, online options and shifting fashion tastes. In April, Gap Inc.’s Weddington Way bridal brand announced plans to close, which followed J. Crew Group Inc.’s decision in 2016 to shut its wedding-dress business.
The previous owner of David’s Bridal, private equity firm Clayton, Dubilier & Rice, took control of the retailer in a more than $1-billion leveraged buyout in 2012. But sales and earnings weren’t enough to carry the debt load. The company, which has operated for more than six decades, has more than 300 outlets in the United States, Canada and the U.K. and franchise locations in Mexico.