David Bridal Filed into bankruptcy Monday, days after announcing plans to lay off more than 9,000 workers nationwide later this year.
The popular wedding dress retailer said its stores and e-commerce website will remain open during the financial restructuring process. David’s Bridal executives said they were trying to arrange a sale of the company. The Pennsylvania-based company, which filed for Chapter 11 bankruptcy protection, is $257 million in debt, according to court documents.
“We have successfully modernized our marketing and customer interaction processes and made our retail service levels best-in-class,” said CEO James Marcum. Report. “However, our business continues to be challenged by the post-Covid environment and uncertain economic conditions, so we are taking this step to identify a buyer who can continue to operate our business going forward.”
Founded in 1950, David’s Bridal sells mostly wedding dresses and prom dresses in 294 stores in the United States, Canada and the United Kingdom. In court DocumentsDavid Bridal says that approximately 4 in 4 American brides get their wedding dress from the company, and nearly 90% of brides visit the store’s website at least once during their wedding planning.
David Bridal plans to lay off 9,236 employees in three waves between April and August. Notice Published Friday by the Pennsylvania Department of Labor. As of April, the company had about 10,000 employees — 2,000 full-time and 8,000 part-time. Some layoffs have already begun, the company said in a statement on Monday.
“In line with market realities and our approach going forward, we made the difficult decision to reduce our corporate workforce last week,” said David Bridel. “This reduction does not affect store employees.”
Marcum said in court documents that half a dozen reasons contributed to why David Bridal had to file for Chapter 11 — one of which was that couples are increasingly wearing less formal dresses at their weddings.
The company filed for Chapter 11 Bankruptcy in November 2018 Seeks to reduce $400 million in debt. The company emerged from bankruptcy in January 2019, just in time for the start of its busy season. The peak sales season runs between January and May each year, but fewer customers bought gowns in the 2019 season because the company’s bankruptcy the previous year had dented customer confidence, Markham said.
While more people are getting married after the pandemic, “it’s not a win for David Bridal as brides continue to migrate to other retailers for their needs,” Neil Sanders, managing director of Global Data Retail, said on Monday. The high cost of living couples face these days is pushing them to thrift stores for dresses and “unfortunately, David’s Bridal has a lot of expenses and the current demand isn’t enough to pay the bills,” Sanders said.
With the exception of David Bridal, the US retail industry shows signs of a difficult merger. Party City, Serda Simmons and Tuesday Morning have all filed for bankruptcy so far this year.
Elsewhere, the Wall Street Journal reported that Best Buy will soon lay off hundreds of employees who specialize in selling computers and smartphones. reported Last week. There is Disney Amid laying off 7,000 workers when Walmart plans to close 19 locations this year – Mostly in major cities like Atlanta, Chicago and Portland.
Similarly, Bed Bath & Beyond said It plans to close nearly 240 stores this year As part of a larger effort to avoid bankruptcy. Analysts at UBS are expecting retailers About 50,000 stores will close over the next five years Due to the ever growing importance of online shopping; Consumers are tightening their wallets due to increased borrowing costs and inflation.
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