David's Bridal files for bankruptcy, stores remain open

The bridal industry is taking a hit now that David's Bridal, one of the nation's major bridal gown suppliers, filed for bankruptcy last week. The announcement left more than 9,000 employees with impending loss of work and wedding parties with uncertainty.

David's Bridal filed for bankruptcy April 17, the second time in five years. The company plans to keep all stores open while laying off more than 9,000 employees.

Let's take a closer look at what led to the move and how it's impacting the business.

Behind the bankruptcy

The company filed for a Chapter 11 bankruptcy, citing several financial and pandemic-related factors. Among these issues, the business has $257 million in debt, per court filings.

High inflation and economic uncertainty during the COVID-19 pandemic posed serious challenges, said CEO James Marcum.

"Our business continues to be challenged by the post-COVID environment and uncertain economic conditions, leading us to take this step to identify a buyer who can continue to operate our business going forward," Marcum said. "We are determined to stay focused on our future, because we believe we have an important role in ensuring that every bride, no matter her budget, can have her perfect dress."

The company also cited declining demand for traditional weddings, as some couples opt for non-formal attire, according to the court filings.

Employee layoffs

The company recently announced its plans to lay off more than 9,000 workers this year. The layoffs began in April and will continue in the coming months. David's Bridal will lay off 9,236 employees nationwide in three waves from April to August, according to a notice of the Pennsylvania Department of Labor and Industry. Phase one began April 14, phase two will last from May 13-27 and phase three will run from June 12 to August 11. The company also filed a WARN act with the State of Michigan.

The company currently employs around 10,000 employees, both full-time and part-time workers. This includes 2,000 full-time and 8,000 part-time workers.

Customers: what to know

All orders will continue to be filled and gift cards, returns and exchanges remain valid. As all locations stay open, the website will also remain fully operational, providing an option for online orders.

The company's Diamond club loyalty program will also continue operating, allowing customers to earn points on their online and in-store purchases for discounts and rewards.

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David's Bridal will work to maintain quality experiences for customers during this transition period, continuing the company's successful legacy.

"We remain as committed as ever to providing excellent service, delivering for our brides and customers, and being part of magical moments," Marcum said.

Seven decades of service

The Pennsylvania-based chain operates 300 locations nationwide, including eight in Michigan. The business opened in 1950, providing attire for weddings and other special occasions to seven generations of customers. Products include bridal gowns, bridesmaids dresses, tuxedos, shoes and accessories.

The business remains one of the most popular in the bridal industry nationwide, selling dresses to one in four brides in the U.S., according to the company.

Previous bankruptcy

The company previously filed for bankruptcy in 2018, facing financial issues and debt. The business was then able to rebound, reducing its debt and getting a new owner in Oaktree Capital Group.

Next steps

The company is currently searching for a new owner in order to maintain operations and resolve its financial troubles. If it is unable to secure a new owner, the business will eventually be forced to close and liquidate its assets.