David’s Bridal files for bankruptcy protection, may close stores
David’s Bridal filed for bankruptcy protection 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 after COVID-19 restrictions and moves to expand into more affordable dresses. David’s reported 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 James Marcum said in court Monday afternoon. An additional 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 U.S. 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 after 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 other options.
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.
Conshohocken, Pa.based David’s employs about 10,000 people, 2,000 of whom are full-time workers, according to court papers.