David’s Bridal operates two retail stores in Idaho and has almost 300 locations around the country, but the last few years have not been kind to the 70-year-old company. David’s Bridal emerged from a Chapter 11 bankruptcy in 2018 leaner and more competitive, but soaring inflation, changing consumer tastes and cash flow problems have hampered the company’s recovery. On April 17, David’s Bridal filed its second Chapter 11 bankruptcy in five years. Chapter 11 protection will allow the company to remain in business until a buyer can be found.
Changing consumer preferences
David’s Bridal is one of the nation’s largest wedding gown and formal attire companies, and about one in four American brides walk down the aisle in one of its dresses. However, changing consumer preferences have impacted the company’s bottom line in recent years. Many couples are now choosing to have less formal weddings, and many brides now shop for wedding gowns at thrift stores. These changing consumer preferences have caused “severe liquidity constraints” according to the company’s CEO.
Stores to remain open
David’s Bridal says that it plans to keep all of its stores open as it searches for a buyer, but it also announced days before its Chapter 11 filing that it will be laying off 9,200 of its approximately 11,000 full and part-time workers. The paperwork does not reveal how the company plans to operate almost 300 retail locations, fulfill existing orders and serve new customers with only a skeleton staff.
Wedding products and services
Companies that offer wedding products and services often struggle when consumer preferences change because their customers rarely provide them with repeat business. When a company with a substantial brick-and-mortar presence and a large payroll is unable to adapt to evolving buying habits, bankruptcy may be the wisest option.