David's Bridal Emerges From Bankruptcy in Under Two Months
(Bloomberg) -- America’s largest wedding gown retailer emerged from bankruptcy on Friday, just weeks after it first sought protection from creditors.
David’s Bridal Inc. shrunk its debt load by about $450 million and is now owned by lenders including Oaktree Capital Group. The company, which filed for bankruptcy in November, was looking to exit bankruptcy quickly to avoid scaring off brides that might fear a store under court protection from creditors was at risk of collapsing, destroying wedding plans in the process.
Customers tend to associate the word “bankruptcy” with a company’s liquidating and going away, not with its reducing debt while continuing to operate, Chief Executive Officer Scott Key said in an interview. “It’s important to maintain trust” with customers and employees that are involved with weddings, a time where brides are often spending heavily and don’t want plans to be foiled.
January is a critical time for companies like David’s Bridal, as people that get engaged over the holidays turn into wedding dress buyers. Cutting debt “frees our ability to re-invest in the customer experience, our stores and digital experience,” Key said. “It puts us in a position of strength going forward.” The company recently acquired Blueprint Registry, an online registry system, and is expanding its dress sizes to accommodate more customers.
David’s Bridal, based in the Philadelphia suburb of Conshohocken, is one in a procession of retailers to file for Chapter 11 court protection after struggling with heavy debt loads. This week Gymboree filed to liquidate in bankruptcy, less than two years after it reorganized in bankruptcy.
The previous owner of David’s Bridal, private equity firm Clayton, Dubilier & Rice, took control of the retailer in a more than $1 billion leveraged buyout in 2012. But sales and earnings weren’t enough to carry the debt load. The company, which has operated for more than six decades, has more than 300 outlets in the U.S., Canada, U.K. and franchise locations in Mexico.
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