After weeks of anticipation, David’s Bridal has publicly announced its filing for Chapter 11 bankruptcy as part of a company restructuring support agreement (RSA) that will keep the retailer in business as it attempts to get back on its feet.
The wedding dress chain said the plan will reduce the company’s debt by more than $400 million, taking a substantial chunk out of the company’s approximate total debt of $760 million. The court-supervised process is expected to be completed by early January.
The company was quick to quell the worries of customers who have already placed orders with the wedding dress retailer, emphasizing that David’s Bridal locations across the country will remain open throughout the bankruptcy process.
“David’s Bridal has sufficient liquidity to meet its business obligations and will continue to operate its business as usual throughout the court-supervised restructuring process,” the company said in a press release. “Customers can continue to shop across the more than 300 David’s Bridal stores and online without disruption. Orders will arrive on time and bridal appointments will not be impacted.”
The conditions of the retailer’s Chapter 11 filing will provide the company with $60 million in new debtor-in-possession financing, on top of a pre-existing $125 million in asset-based lending credit. In addition, the conditions of the bankruptcy will allow David’s Bridal to continue paying employee wages and benefits, and honor customer payments and orders for dresses and alterations.
The company added that it plans to emerge from bankruptcy with a new focus on its digital retail presence.
“We are implementing our consensual restructuring plan from a position of strength and, with the support of our lenders, noteholders and equity holders, the plan will allow us to reduce our debt significantly while continuing to run our business as usual,” said Scott Key, CEO of David’s Bridal, in the company’s release.
“In the end, we will be able to allocate even more of our resources towards making strategic investments in digital technologies and talent that will drive long-term growth and operational excellence at David’s Bridal,” he concluded.