Photo: Canva
David’s Bridal will get a new lease on life now that CION Investment Corporation has closed its bankruptcy court-approved transaction to acquire the ailing wedding retailer, narrowly avoiding liquidation. The exact terms of the deal were not disclosed, but CION has invested $20 million into the business to fund growth and assumed bankruptcy-related liabilities, while Bank of America will provide a $50 million revolving credit facility and a $20 million term loan facility to enhance the retailer’s financial flexibility.
Up to 195 stores will be saved by the last-minute deal, though the company will end up even leaner than before. David’s Bridal will preserve 7,000 jobs, though it is unclear how this announcement will affect the ongoing 9,236 cuts announced in a WARN notice when the company filed for bankruptcy in April.
“Today’s 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 David’s Bridal’s CEO Jim Marcum in a comment regarding the deal. “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.”
However, David’s Bridal and CION will face headwinds as they seek to grow the company back into the premiere wedding destination. The number of weddings fell to the lowest level in 121 years in 2020 and has yet to fully spring back, according to Marcum in court documents. The industry only reached 1.9 million weddings in 2022, down from over 2.2 million annually in the years leading up to the pandemic.
Additionally, this is the retailer’s second trip to bankruptcy court in less than five years. David’s Bridal spent two months in Chapter 11 in late 2018 and early 2019 to improve its balance sheet, which could speak to longer-term operational weakness.
Still, David’s Bridal hasn’t taken recent challenges sitting down. In 2023 alone, the retailer rolled out multiple initiatives, including:
- House of Prom, a pop-up store concept designed to generate exposure for the brand outside of weddings and help it court the valuable teenage demographic.
- Pearl by David’s, a digital planning platform and vendor marketplace featuring registry planners, wedding checklists, and tools for creating wedding vision boards.
- The Wink, a series of product guides featuring seasonal content regarding trends and inspiration curated by the retailer’s internal designers.
These modern tools may help David’s Bridal remain relevant with today’s brides and grooms, but competition is fierce. Men’s Wearhouse has launched its own wedding-focused tool, Wedding Wingman. Trends like couples marrying later in life and growing interest in smaller weddings will likely change consumer expectations. Whatever the future holds, CION and David’s Bridal will have their work cut out for them.
BrainTrust
Neil Saunders
Managing Director, GlobalData
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
Patricia Vekich Waldron
Contributing Editor, RetailWire; Founder and CEO, Vision First
Discussion Questions
DISCUSSION QUESTIONS: Will David’s Bridal’s pop-ups and wedding planners play an important role in its revival strategy, or are they just distractions from the retail fundamentals? How does David’s Bridal need to change its ongoing operations in order to avoid a third bankruptcy filing?
Poll
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David’s Bridal is a seriously battered and bruised brand, and the future remains uncertain as ever. The initiatives described may or may not produced the outcomes management wants, but they get credit for trying. After two bankruptcy filings, it’s hard to see a path forward that will restore David’s Bridal to its once dominant position, especially in the face of waning demand.
There will only be one winner in this deal. It will be CION, which invests almost exclusively in debt.
Cion will likely just sit back and take their fees and interest payments, making sure that they get paid before additional funds are spent on future initiatives.
David’s is your mother’s bridal shop and I don’t see today’s women buying in.
While I am sure the financial players in this move will come out on top, I am not sure this puts David’s Bridal on a sustainable trajectory. None of the issues which caused the failure have been resolved and market trends remain against the company. Experimenting with new ideas and initiatives is good, but the core business is still in need of reinvention and reinvigoration.
It’s always the finance partner who wins in these deals. David’s is a stale brand and given the different approach to weddings has become, it will be difficult for them to change as quickly as needed.
Distractions are such only if you let them become such; translation: they’re not if you know what you’re doing. So do “they know what they’re doing”? They in this case is a company I doubt any of us have ever heard of, so there’s not a lot of history to go on. I recall that the consensus was that the bankruptcy wasn’t some technical issue – like overleverage – but fundamental problems with the business model ,,, namely it was a player in a crowed, declining market that wasn’t distinguishing itself.
It’s not clear how that’s materially changed. So the usual: well wishes…and crossed fingers.