The 68-year-old retailer with more than 300 stores, including two Indianapolis-area stores, filed for bankruptcy Monday, with a plan to cut debt by more than $400 million.
By Bloomberg News
David’s Bridal Inc.—a 68-year-old retailer with more than 300 stores, including one in Greenwood—filed for bankruptcy Monday with a plan to cut debt by more than $400 million and a deal with lenders that will keep stores open during a reorganization.
The company operates a store in Greenwood at 1238 U.S. Highway 31 North, and a second Indianapolis-area store on the northeast side. David’s also has Indiana stores in Bloomington, Lafayette and Terre Haute.
The Chapter 11 filing in U.S. Bankruptcy Court in Delaware listed liabilities of more than $500 million and assets of more than $100 million, according to the filing. The court-supervised restructuring allows the business to keep operating, and thus avoid the calamitous and sometimes tearful impact on brides that often accompanies the collapse of wedding retailers.
David’s signed a restructuring support agreement with its main stakeholders before going to court that could speed the company through bankruptcy in a matter of weeks, and it doesn’t expect major store closures or liquidations.
The restructuring agreement gives a majority of the reorganized equity to senior lenders, including Oaktree Capital Group LLC. The Conshohocken, Pennsylvania-based retailer asked for court protection after skipping an Oct. 15 interest payment on a loan.
David’s obtained commitments for $60 million in new debtor-in-possession financing from its current term loan lenders and a recommitment of its existing $125 million revolving credit facility to support the company through its restructuring, according to a news release. The retailer aims to emerge from bankruptcy by early January, and says vendors and manufacturing partners won’t be impaired.
The retailer has a history of bouncing from one owner to the next, accumulating debt along the way.
Marriage rates have fallen since the 1980s, and although the amount that Americans typically spend on weddings has risen, the industry has been thrown into chaos by intense competition, online options and shifting fashion tastes.
