David’s Bridal, the largest wedding gown retailer in North America, filed for protection from its creditors in the U.S. and Canada on Monday.
David’s Bridal said in a statement that it would “fulfil all customer orders without disruption or delay,” but might be forced to wind down its operations if it cannot find a buyer for its business.
The Pennsylvania-based company filed for protection from its creditors under Chapter 11 of the U.S. bankruptcy code.
Court documents suggest the company is pursuing a similar move under the Companies’ Creditors Arrangement Act for its Canadian operations, which includes 12 stores across Canada.
“The company expects to file a recognition proceeding in Canada and a subsidiary of David’s Bridal expects to commence an administration proceeding for its business in the United Kingdom,” the company said in a press release.
It’s the second time David’s Bridal has gone bankrupt since 2018, as the company said its business has suffered in recent years due to the COVID-19 pandemic, decreased demand for wedding dresses and high inflation.
COVID-19 forced many couples to opt for smaller weddings because of restrictions, but even with larger gatherings allowed, many are choosing to keep their big day small.
“We are determined to stay focused on our future, because we believe we have an important role in ensuring that every bride, no matter her budget, can have her perfect dress,” CEO James Marcum said in a statement.
David’s Bridal has 294 stores across the U.S. and Canada and eight franchise locations in Mexico, offering wedding dresses for as low as $199 US.
Layoffs coming
The privately owned company on Friday sent notices under the WARN Act, a federal law that requires businesses with 100 or more employees to provide 60 days’ notice before engaging in mass layoffs, saying it intended to lay off more than 9,000 employees by August.
About 25 per cent of brides in the U.S. wear David’s Bridal gowns at their wedding, and David’s Bridal has dressed 70 million brides over its 70-year-old history, according to the company’s court filings.
The company has $256.9 million US in debt, and it has engaged a consultant to co-ordinate store closing sales if necessary.
While liquidation sales are possible, the company is telling customers that it’s business as usual for now. “Our stores are open, and we intend to fulfil orders without disruption or delay,” an FAQ document for brides reads.
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