A thriving wedding industry is apparently not enough to sustain the fortunes of one of the country’s largest bridal retailers.
David’s Bridal prides itself on selling one in three wedding dresses in the United States. Still, it continues to struggle to control its costs after it filed for bankruptcy five years ago, and it’s working with advisors to explore its options.
According to two people familiar with the matter, nothing has been finalized yet, but one possibility is that the retailer may file for bankruptcy again within weeks.
The company has teamed up with investment bank Houlihan Lokey to investigate a sale that could be included as part of a bankruptcy filing, according to one of the people, who spoke on condition of anonymity to discuss internal deliberations.
Even if it files for bankruptcy, David’s Bridal plans to continue to meet the demands of its customer base, which is largely made up of brides, according to one of those familiar with the matter. That includes providing dresses and holding fittings. That was the same promise it made when it first filed for bankruptcy in 2018.
In addition to Houlihan Lokey, David’s Bridal hired the law firm Kirkland & Ellis and the investment firm BRG to explore the possibilities.
“As is our practice as a company, we don’t comment on speculation,” Laura McKeever, a spokeswoman for David’s Bridal, said in an email Friday.
A spokeswoman for Kirkland and a spokesperson for Houlihan declined to comment. A BRG representative did not immediately respond to a request for comment.
The bridal retailer’s financial strain is the latest sign that even renewed spending on events like weddings hasn’t translated into equally buoyant retail sales as consumers retreat to high-priced items. Businesses also feel pressured by inflation and deteriorating credit conditions.
Corporate insolvencies hit their highest monthly count since July 2020 in March, before the Federal Reserve injected the US economy with billions of capital that has kept many companies afloat.
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David’s Bridal is the latest beleaguered retailer under pressure as credit conditions tighten. Bed Bath & Beyond sold shares in February to avoid bankruptcy. In January, Party City filed for bankruptcy. The following month, discount home goods retailer Tuesday Morning did the same.
Retailers who file for bankruptcy do so to get rid of debt and streamline their costs. A second filing would give David’s Bridal the chance to make structural changes it didn’t make the first time around, such as closing stores. The retailer, which has about 300 locations, mostly in the United States, failed to close a significant number of stores last time during its swift trip through bankruptcy court. It emerged from that bankruptcy after two months.
Bridal retailers, in particular, are sensitive to ensuring they continue to provide goods and services to brides-to-be and wedding planners, working against the intense deadline of a wedding day.
Nearly 2.5 million weddings were held in 2022 — the most in four decades — after the pandemic caused a backlog. But the lull in celebrations changed the way people dressed for weddings and where they bought their clothes.
More shoppers are now going to retailers that don’t exclusively sell wedding dresses, including thrift stores. As social distancing made smaller and outdoor weddings more popular, some brides opted for shorter dresses instead of gowns. Supply chain grunts during the pandemic had also disrupted the wedding industry by limiting the availability of new stock and delaying delivery times.
David’s Bridal was not spared. The retailer had to move production to and from Vietnam, Sri Lanka and China as strict Covid lockdowns hurt production. It also resorted to air freight, which is more expensive than shipping by boat, to get dresses to brides on time.
The retailer has moved beyond the bridal category by selling clothes for other celebrations such as quinceañeras and proms. During the pandemic, when it couldn’t access professional models, David’s Bridal even enlisted its own employees to be photographed in their dresses. That move became a good tool to retain employees during the tight labor market in 2021.
