End of the big, fat American wedding company?
THERE’S A WAR BEING WAGED OVER THE AMERICAN WEDDING AS DISRUPTERS HIT THE BRIDAL INDUSTRY
his fall, Alfred Angelo Bridal held a big sale at its warehouse in Deerfield Beach, Florida. The boutique wasn’t courting brides-to-be however - individual gowns couldn’t be purchased, though they were available in bulk. The top seller that day wasn’t even a dress; it was the store’s 2008 Ford Cargo Van, which went for $5,300.
This particular sale was a bankruptcy auction. Alfred Angelo, which once handled a well-respected corner of the US wedding industry, filed for liquidation in July. Overnight, customers found their orders unfulfilled, leaving brides scrambling to find dresses in time for weddings that in some cases had to be called off.
The good news for Alfred Angelo was that it managed to raise about $250,000 to pay off creditors. The bad news was that its largest lender, a Connecticut asset management firm, had extended it $54 million.
Even before Alfred Angelo’s sudden collapse, the bridal industry was in chaos. The old guard had been losing business to upstarts backed by Silicon Valley and legacy retailers seeking a chunk of a reliable market. David’s Bridal, the longtime industry leader with a 25 per cent market share, is writhing under a pile of debt. And it’s not just about the dress: Signet Jewelers, owners of Jared, Kay, and Zales, is dealing with lacklustre sales as bigger fish move into the engagement and wedding ring space.
Shift in outlook
Ratings firm Moody’s shifted its outlook of David’s from stable to negative in September. Raya Sokolyanska, an analyst at Moody’s, said there’s a new paradigm emerging in bridal retail. “The bride can buy a budget wedding gown online, or a white dress from any apparel brand instead of a traditional gown,” she said. “That’s increased competition for David’s Bridal and other bridal retailers, especially at the lower end.”
“The consumer,” Sokolyanska said, “has more choices.”
More choice may be good news for the soon-to-bebetrothed, but it’s small solace for the little stores who for decades traded on a deep cultural fixation with wedding accoutrements. It also doesn’t help that the overall pie is shrinking — marriage rates have fallen since the mid-1980s as more couples choose to live together before heading to the altar. The number of adults who never married has reached a record high of 20 per cent, a cultural earthquake largely driven by millennials skipping the tradition entirely. In 1960, just 9 per cent of adults aged 25 and older had never been married. This trend is expected to continue, with researchers forecasting just 5.8 marriages per 1,000 people in 2022, down from an estimated 6.4 marriages this year.
Even as wedding rates fall, a frenzy is underway to claim a foothold in the existing space. Gap has Weddington Way; Urban Outfitters has BHDLN. Nordstrom, Macy’s, and Bloomingdale’s are all taking a piece of the bridal business, selling everything from bridesmaid dresses to wedding bands.
Then there are the startups. Venture capital firms have pumped at least $490 million into the bridal industry in recent years, according to data compiled by Bloomberg. There are new registry services such as Zola and Blueprint. Dress renters include Vow to be Chic and Brideside. All Seated handles seating charts while Paperless Post does invitations (with actual paper if you like). Diamond Foundry, backed by $100 million in venture funding, grows diamonds in a California laboratory for setting in engagement rings.
For some investors, their zeal paid off. When Gap acquired Weddington Way in December for an undisclosed sum, the bridesmaid dress start-up, founded in 2011 by a former Bloomingdale’s buyer, had already amassed $11.5 million in venture capital.
For decades, if you were getting married, chances are you bought everything for the wedding in the same way. You went to a one-stop shop with a few loved ones, and you’d get the personal experience of picking out a wedding gown, bridesmaid dresses, accessories, and shoes. The dress selection was unrivalled, and you could even score some bargain numbers for under $100.
Analyst at Moody’s
Ultimate provider
David’s Bridal was the ultimate provider of the bridal shoppe experience, and its ability to make money in a steady fashion didn’t go unnoticed by would-be suitors. The first shop popped up in the 1950s as a single boutique in Florida, before founder David Reisberg sold it to an investor in 1972. The new owner expanded the boutique concept under the David’s Bridal banner, opening both stand-alone outposts and shops within department stores. The chain slowly expanded until it was the biggest bridal seller in the country. In 1999, the chain went public. A year later, May Department Stores Co. acquired it for $436 million. Eventually David’s was purchased by Leonard Green & Partners, a private equity firm. Then, in 2012, it was bought by another firm, Clayton, Dubilier & Rice.
But as David’s Bridal bounced from one parent to the next, the 300-plus store chain began to accumulate debt. This included a $491 million senior secured term loan due in 2019 and $270 million in unsecured notes due in 2020. Its sales didn’t kept pace. Earnings have declined 30 per cent since their 2012 peak. The retailer currently has a revenue base of $738 million, according to