David’s Bridal already has something old: 60 years in the bridal industry. Now, having emerged from three months in bankruptcy proceedings, it is trying something new as start-up competition and millennial brides upend its market.
The retailer filed for bankruptcy in November, saddled in debt that partially stemmed from its $1.05 billion sale to private equity firm Clayton Dubilier & Rice in 2012. It emerged from bankruptcy in January, a quick in-and-out made easier after its lenders and equity investors agreed on a new structure.
“We are very happy to be on the other side of it,” Chief Executive Officer Scott Key told CNBC.
Now, David’s Bridal is looking to conquer the new bridal landscape even as the $2.4 billion bridal-wear industry declines along with the marriage rate. Newer online retailers like Reformation offer brides more relaxed alternatives to traditional gowns. Online retailers like Jasmine Bridal are making their own wedding dresses and selling them for less than gowns sold in stores in the past.
Millennials are also marrying later — though later weddings could lead to more expensive affairs.
“We are making significant investments in improving our overall customer experience,” said Key.
Those investments include Blue Print Registry, which David’s Bridal acquired last year, giving it technology to help brides plan their registry, import registries from other retailers and register for cash. It unveiled a new commercial in January that reminded brides “most importantly, something you.” It is working with its in-house alteration team to help brides customize and personalize their dresses. It is evaluating other ways to help brides streamline wedding planning.
It is also offering more dresses in a broader array of sizes, while making certain dresses available at more price points. It lowered prices of many of its best-selling bridesmaid dresses.
One significant change not in the works is cutting away at its store base. Unlike many retailers that enter bankruptcy to help get rid of bad leases and trim their footprint, David’s Bridal emerged with roughly the same 300 or so stores it had across the U.S., Canada, U.K. and in Mexico, through franchise owners. It continues to add to its footprint in Canada, opening up a store in Vaughan, Ontario, last month. It has two stores owned by franchisees in Mexico, with two more in the works.
Barring the occasional exception, most David’s Bridal stores are profitable, said Key.
The retailer is also hoping to avert another trend marked by other bankrupt retailers: a second trip back to bankruptcy court. Gymboree filed for the second time earlier this year, while Payless is planning its own potential second trip into bankruptcy court, CNBC has reported, though those plans could still be averted.
While credit ratings agency S&P has said it sees positive signs for the retailer with its “significantly reduced balance sheet debt and a still fairly well-recognized brand name,” it has also raised some potential pitfalls. S&P said the bridal retail landscape remains challenging, and there is “execution risk” associated with David’s Bridal’s new strategies.
Key, though, says he remains confident, in part due to its continuing hold in the bridal market and the changes the company expects to implement.
Out of bankruptcy “we can return to what we do well: servicing one in three brides in the market place,” said Key.