One of the largest bridal gown retailers in the United States has filed for Chapter 11 bankruptcy protection. The news comes on top of an announcement to cut over 9,000 positions nationwide.
David’s Bridal announced earlier this month that it would be implementing job cuts across 15 stores in Pennsylvania, starting April 14. The retailer, which is based in Conshohocken, Pennsylvania, employs more than 11,000 workers. The filing will also affect the company’s operations in Canada as well as its subsidiaries in the UK.
According to the company, plans are in place to sell the business. Meanwhile, stores remain open and customer orders for bridal gowns are being fulfilled as usual, without delays or disruptions, the company says.
In addition, online platforms will remain open to brides to assist with wedding planning. The company says gift cards, returns, and exchanges will continue to be honored during the procedure, PennLive reported.
In an interview with CNN Business last week, the company said it is evaluating its strategic options and that a sale process is underway.
This is the second time David’s Bridal has filed for bankruptcy in the last five years. In 2019, the company emerged from its bankruptcy filing of the previous year. An increase in company debt as well as a heavy decline in sales forced the company into the measures at the time.
After attempts to stabilize its business thereafter, the COVID-19 pandemic with the associated lockdowns and social restrictions created yet another big obstacle for the company. David’s Bridal had initially anticipated a major upswing in demand for wedding gowns after the easing of restrictions.
Limitations in the company’s cash flow stymied efforts to ramp up marketing efforts and sales procedures, rendering the company unable to finalize the process out of court.
David’s Bridal operates more than 300 stores across the United States, Canada, and the United Kingdom.
The retail industry has been pummeled by job losses recently. Earlier this month, Walmart announced that it would be laying off over 2,000 workers. According to a recent report by the Wall Street Journal, Best Buy is also heading in a similar direction, with hundreds of in-store positions being cut.
Chapter 11 bankruptcy grants protection for businesses from creditors while they continue to operate and create a solution for insolvency. The procedure must be sanctioned by both parties and is subject to approval by a federal bankruptcy judge.