A LETTER FROM AMERICA

The news from the States that has us all wondering and worrying about, and that should at least be on the ‘radar’ of UK boutique owners, is the mid-April announcement that David’s Bridal, Inc. has cut its workforce by upwards of 75%, followed by a notice two days later of a filing for Chapter 11 bankruptcy protection. Peter Grimes reports on reactions from the industry

This will undoubtedly impact on brides in the UK as filings have also been made for David ’s Bridal’s Canadian and UK divisions. In the US, the company operates some 300+ stores, which it claims accounts for almost a third of all bridal sales in the country.

David ’s Bridal previously filed for Chapter 11 protection in 2018 as it then struggled with an immense debt load, emerging a year later with a restructuring plan. This current filing, according to James Marcum, CEO, was taken partially in an effort to restructure its business for a possible sale.

“Our business continues to be challenged by the postCOVID environment and uncertain economic conditions,” said Marcum in an accompanying announcement, “leading us to take this step to identify a buyer who can continue to operate our business going forward.”

Other factors reportedly include competition from online retailers, primarily in the prom and bridesmaids sectors; a shift by its core budget customers to more casual wedding attire, and the costs and pressures of a staggering debt load.

“An increasing number of brides are opting for less traditional wedding attire, including thrift wedding dresses,” David’s Bridal said in a bankruptcy filing. “These shifting consumer preferences have significantly exacerbated the company’s financial circumstances.”

Though David’s Bridal claimed in that announcement that its stores remain open, it did caution that if a buyer is not found, it will be forced to liquidate all stores.

In the short term, the layoff of 9,236 employees of the company’s total US workforce of approximately 11,000 will make its understaffing exponentially worse, threatening to further erode fragile customer service and selling departments. A drastic step that bridal industry and retail consultants suggest is an indication that store closings have to be an integral part of its plan to attract a potential buyer.

The unanswered question left hanging is this: Who, in this lending environment with other large scale retail operations in financial trouble and in the midst of restructuring, would be interested in acquiring even a scaled back David’s Bridal?

How the news was greeted

Reaction to this news in the industry has been mixed, going from muted celebrations to concerns about the impact on independent boutiques of David’s store closings, and a corresponding ‘dump’ at fire-sale prices of the estimated 150,000-300,000 gowns currently hanging in its stores.

“Buckle up,” one East Coast boutique wrote confidentially. “This is going to be much worse than Alfred Angelo’s abruptly closing, and will have much more of an impact than David’s routine $99 dress sale. Could be a quarter of that on current merchandise instead of old stock!” (Many well remember Alfred Angelo abruptly filing chapter 7 bankruptcy in 2017, closing 60 company stores and leaving its estimated 1,400 wholesale accounts to pickup the pieces with angry and distraught brides.)

Another comment echoed by others was “Hooray… glad to see they’re finally going out. It might be short term pain until the industry recovers, but long term this is good news”.

Boutiques are not the only segment watching the news. Because of its size, David’s bankruptcy/closure will be felt throughout the supply chain. Manufacturers/ distributors have already reached out to their factories to ensure they are in sound financial health and capable of fulfilling orders… especially those factories known for producing David’s Bridal goods.

The positives that will result

A sizable number of stylists and seamstresses nationwide are now out of work and quite probably want to stay in the industry. Alhough a David’s retail stylist may not have been trained in the selling style of your boutique, they do have indispensable product knowledge. And a seamstress capable of doing the delicate work of alterations would be an asset to any bridal boutique, either as part of an in-store department or as a source for alteration referrals.

Regardless of what you think or anticipate about a possible outcome and its impact, and regardless of your price point or the demographics of your brides, one outcome seems very clear: a David’s sale and/or liquidation will impact you and your boutique as these headlines will unnerve your brides.

So… be prepared to respond to her extra stress or ‘random’ questions by emphasising your core strengths: your history, stability, reputation and commitment as an independent, locally-owned boutique.

The Perfect Duo

And that’s not just the two labels in the portfolio, but the twosome behind them