David’s Bridal files for Chapter 11 bankruptcy protection
David’s Bridal filed for bankruptcy protection on Monday, with a promise that all dress orders would be delivered on time and bridal appointments would not be affected.
The filing, which was expected, comes as the retailer is struggling with a heavy debt load, increased competition from lower-priced competitors and changing bridal fashions. It is part of a previously arranged deal that David’s Bridal reached with its lenders that will reduce its debt by more than $40 million and provide significant financial flexibility to support long-term growth prospects. The retailer expects to complete the court-supervised process by early January.
David's Bridal has received commitments for $60 million in new debtor-in-possession financing from existing lenders, along with a recommitment of its existing $125 million asset-backed loan, which will help it stay open for business during restructuring. The retailer said that customers can continue to shop across its more than 300 and online without disruption. Orders will arrive on time and bridal appointments will not be impacted.
"Today's announcement is just the next step in our efforts to proactively secure David's Bridal for a long, successful future,” said CEO Scott Key. “We are implementing our consensual restructuring plan from a position of strength and, with the support of our lenders, noteholders and equity holders, the plan will allow us to reduce our debt significantly while continuing to run our business as usual.”
Looking ahead, Scott said, the retailer will be able to allocate even more of its resources “towards making strategic investments in digital technologies and talent that will drive long-term growth and operational excellence at David's Bridal."
Private-equity firm Clayton Dubilier & Rice LLC acquired David’s Bridal in a 2012 deal valued at $1.05 billion.