David's Bridal Files for Chapter 11 Bankruptcy Protection
Wedding dress and special occasion apparel retailer David's Bridal has filed for Chapter 11 bankruptcy protection.
The move is intended to help the retailer reduce its $760 million debt load by $400 million and to continue to operate business as usual.
David's Bridal has sufficient liquidity to meet its business obligations and will continue to operate its business as usual throughout the restructuring process. Orders will arrive on time and bridal appointments will not be impacted, according to the retailer.
The bridal company is dealing with a decline in spending on wedding dresses and a trend towards more casual and e-commerce choices, in addition to couples waiting longer to get married. The average price paid for a wedding dress fell 3.5% to $1,509 in 2017, according to TheKnot. The number of new marriages per 1,000 Americans was 6.9 in 2016, down from 8.2 in 2000, representing a decline of about 16% in the wedding rate, according to the U.S. government.
"Today's announcement is just the next step in our efforts to proactively secure David's Bridal for a long, successful future," said CEO Scott Key. "We are implementing our consensual restructuring plan from a position of strength and, with the support of our lenders, noteholders and equity holders, the plan will allow us to reduce our debt significantly while continuing to run our business as usual. We will be able to move through the Court process very quickly, and in the end, we will be able to allocate even more of our resources towards making strategic investments in digital technologies and talent that will drive long-term growth and operational excellence at David's Bridal."
In conjunction with the pre-packaged Chapter 11 process, the company has filed a number of customary motions seeking authorization to support its operations during the court-supervised process, including authority to continue payment of employee wages and benefits and honor customer payments and orders for dresses and alterations.
As part of the court-supervised process, David's Bridal has obtained commitments for $60 million in new debtor-in-possession ("DIP") financing from its current term loan lenders and a recommitment of its existing $125 million ABL revolving credit facility to support the Company's continued operations during the restructuring. The long-standing vendor and manufacturing partner relationships essential to David's success are expected to be unimpaired during restructuring.