David’s Bridal getting ready for bankruptcy filing
David’s Bridal is making preparations for a bankruptcy filing if the retailer can’t reach an out-ofcourt deal with its creditors, according to people with knowledge of the matter.
The goal is to ease the chain’s debt load of about $760 million with a prenegotiated restructuring plan either in or out of court, said the people, who asked not to be identified because the discussions are private. Either way, David’s has no plans for major store closures or liquidations, and the business would keep operating regardless of a court filing, the people said.
David’s has four locations in the Houston area: in the Galleria area, in Sugar Land, on FM 1960 near Interstate 45 north and in Friendswood.
The wedding gown merchant has until Nov. 14 to make an interest payment that it skipped last month after initial negotiations with three creditor groups stalled. Discussions with debt holders are still underway, and the situation remains fluid, the people said, with no guarantee that a filing will happen or end with a prepackaged plan in place.
David’s and three creditor groups have gone back and forth with out-of-court restructuring proposals for weeks. Early discussions contemplated a rights offering backed by existing note holders including Solace Capital Partners and Oaktree Capital Group, a majority bond and loan holder, the people said. Those talks broke down after the financing from the funds did not materialize and creditors failed to agree on the pricing and terms of the proposed new debt structure, the people said.
David’s, based in Conshohocken, Pa., and owned by the Clayton Dubilier & Rice buyout firm, skipped an Oct. 15 interest payment on its $270 million of 7.75 percent unsecured notes due 2020 at the request of its creditors in order to allow more time to continue negotiations about reworking the company’s debt load. The talks involve the company and advisers for both loan and bond holders, the people said.
Last year, the late-summer shutdown of Florida-based retailer Alfred Angelo roiled the bridal market. The chain posted a notice on its website alerting customers that it would not fulfill any outstanding orders and abruptly closed more than 60 boutiques nationwide, leaving many brides in Houston and elsewhere hustling to find new dresses.
Last year, the late-summer shutdown of Florida-based retailer Alfred Angelo roiled the bridal market. The Florida-based chain posted a notice on its website alerting customers that it would not fulfill any outstanding orders and abruptly closed more than 60 boutiques nationwide, leaving many brides in Houston and elsewhere hustling to find new dresses.
The company, which had locations in uptown Houston, Willowbrook and Baybrook, filed for Chapter 7 bankruptcy and liquidated. Its lengthy list of creditors included hundreds of Houstonarea customers.