David’s Bridal LLC filed bankruptcy for the second time and could close all of its nearly 300 stores if the company is unable to find a buyer in the coming weeks.
(Bloomberg) — David’s Bridal LLC filed bankruptcy for the second time and could close all of its nearly 300 stores if the company is unable to find a buyer in the coming weeks.
The closely held 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 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, Chief Executive Officer James Marcum said in court Monday afternoon. 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 US Bankruptcy Judge Christine M. Gravelle.
The company is preparing to close its stores if it can’t quickly find a buyer for the whole business, according to court papers. If no buyer is found, 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 Monday 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 is in bankruptcy again following a quick trip through Chapter 11 that ended in January 2019 and saw the company continue 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 caused brides to postpone weddings or hold smaller ceremonies. Under Chief Executive Officer Jim Marcum, who came to the company from Apollo Global Management, the retailer began selling quinceañera dresses and in 2021 launched a virtual wedding stylist program.
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 and Party City Holdco Inc.
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).
–With assistance from Eduard Gismatullin and Kevin Kingsbury.
(Updates with details on 100,000 wedding dresses waiting to be picked up starting in the third paragraph.)
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