Done Deal: David’s Bridal sold; up to 195 stores to remain open
David's Bridal has closed on a deal that will keep the company up and running online and in-store — but with a much smaller footprint.
The 70-year-old bridal and special occasion dress retailer, while filed for bankruptcy in April, has closed on the sale of substantially all its assets to Cion Investment Corp. The sale will result in David’s Bridal operating up to 195 stores as well as its e-commerce site. (At the time of its filing, David’s Bridal had about 300 stores across the U.S., Canada, U.K., and franchise locations in Mexico.)
Cion has invested $20 million into the new business to fund future growth and has assumed certain bankruptcy-related liabilities. Additionally, Bank of America will continue to provide financing to enhance David’s Bridal financial flexibility through a $50 million revolving credit facility and a $20 million term loan facility.
“This announcement marks the beginning of David's next era, and with CION's partnership fully solidified, we are excited to continue to serve brides and customers well into the future,” said Jim Marcum, CEO of David’s Bridal. “We believe that the results of our competitive sale process represent the best outcome for our stakeholders, as it provides us with the time and resources to drive forward in implementing our strategic vision. “
When David’s Bridal filed for bankruptcy in April (its second filing in five years,), the retailer said it was evaluating its physical footprint to “maximize value and the prospect of a successful going concern transaction.”
“We believe this transaction to substantially reduce the company’s debt burden and store portfolio will enhance the company’s ability to benefit from the expected post-COVID rebound in wedding activity and position the company for future success,” said Gregg Bresner, president and chief investment officer, Cion.
Mark Gatto, Cion’s co-chief executive officer added, “Our long experience with the operations and management of David’s Bridal and our position as a secured lender enabled us to facilitate a consensual bankruptcy exit transaction that we believe provides strong value to the company’s employees, vendors, landlords, business partners and customers as well as to our shareholders.”
Kirkland & Ellis LLP and Cole Schotz P.C. are serving as legal counsel, Houlihan Lokey Capital, Inc. is serving as investment banker, BRG is serving as financial and restructuring advisor, Osler, Hoskin & Harcourt LLP is serving as Canadian legal counsel, C Street Advisory Group is serving as strategy and communications advisor, and Omni Agent Solutions is serving as claims and noticing agent to David’s Bridal.