Biden's Economy: David's Bridal Files for Chapter 11 Just Days After Announcing 9,000 Layoffs
Citing soft retail sales and other ills, national bridal retailer David’s Bridal filed for reorganization under Chapter 11 of the federal bankruptcy laws on Monday.
The blow fell days after the chain announced it would lay off more than 9,000 workers over the next few months, according to CBS.
The company filed for Chapter 11 reorganization in November 2018 seeking to get out from under $400 million in debt. The company exited its reorganization in January 2019.
“An increasing number of brides are opting for less traditional wedding attire, including thrift wedding dresses,” David’s Bridal said in a filing, according to CNN.
“The demand for formal wedding dresses, bridesmaid dresses, and related accessories has decreased substantially in the current environment,” the filing said.
“David’s Bridal stores remain open, and the Company intends to continue operating in the ordinary course, including by fulfilling all customer orders without disruption or delay. Additionally, the Company’s online platforms, including its Pearl platform and vendor marketplace, remain available and accessible to brides for their wedding planning needs,” the company said in a statement.
The statement said the company had been in search of alternatives but was “unable to finalize its marketing and sale process out of court and intends to continue exploring a sale of all or some of its assets.”
“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,” CEO James Marcum said in a statement.
The company’s Chapter 11 filing said it is $257 million in debt, according to CBS.
But the State of our economy is strong, said Biden!
Retail sales declined in March as consumers cut back spending https://t.co/K0wTXwqxEE
— Laura Ingraham (@IngrahamAngle) April 14, 2023
CNN noted that retail sector bankruptcies are rising, citing filings by Party City, Tuesday Morning, and mattress manufacturer Serta Simmons.
David’s Bridal, founded in 1950, sells wedding dresses and formal gowns in 294 stores in the U.S., Canada and Britain. In its filing, David’s Bridal claimed one in four U.S. brides bought their wedding gowns from the company.
Davids bridal is laying off 9,000 employees during wedding season?? Either the math aint mathing up or this ‘Mild recession’ the govt is telling us isn’t so mild #RecessionTalk
— The Will Westwood Show (@WillTheHeat) April 17, 2023
A Worker Adjustment and Retraining Notification notice filed on the website of the Pennsylvania Department of Labor and Industry said that the company is laying off 9,236 workers. The first cuts took place Friday. Others will come in May, with the final round between June and August.
“We made the difficult decision to reduce our corporate workforce last week in line with market realities and our go-forward approach,” David’s Bridal said according to CBS. “This reduction did not impact store employees.”
Although weddings have increased now that the pandemic lockdowns are over, “this hasn’t translated into success for David’s Bridal as brides continue to migrate to other retailers for their needs,” said Neil Saunders, managing director at GlobalData Retail.
“David’s Bridal has a lot of costs to cover and current demand simply wasn’t bringing in enough to pay the bills,” Saunders said.
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