David’s Bridal has reached a debt deal, enabling the bridal chain to avoid another round in bankruptcy court.
Sources told Bloomberg that the retailer had discussions with lenders and equity holders from its previous bankruptcy filing, including Oaktree Capital Group, with some investors agreeing to rework about $280 million of debt and to provide $55 million of new money to keep the company in business. There would still be about $75 million of outstanding debt.
“A move like this eliminates a ton of question marks and gives us the ability to focus on the future,” Chief Executive Officer James Marcum said in an interview.
David's Bridal filed for bankruptcy a year ago, which led some investors to shy away from the business. As a result, its competition – which is mainly made up of boutiques – “took advantage of it,” Marcum said. Its rivals are “very good at the service level,” he continued. “But David’s value proposition, when stacked up against them, is very strong.”
David’s operates about 300 stores across the U.S., Canada, U.K. and franchise locations in Mexico. Last year, the company moved into the digital world with its acquisition of Blueprint Registry, which aimed to make it easier for brides to register for wedding gifts.
Then-CEO Scott Key said at the time, “As we move forward, our goal is to make all wedding planning simpler for our customers by offering the additional services we know they need. We’re thrilled to integrate Blueprint Registry’s unique registry concept into our business in order to make the busy lives of our brides easier.”
In addition, the Pennsylvania-based retailer brought in a new board of directors with members from Boston Consulting Group and Oaktree.
David’s plans to use the new money to roll out improved marketing and match up the eCommerce pricing with the stores, said Marcum.