Much to the chagrin of brides across the country, renowned bridal gown chain David's Bridal recently filed for Chapter 11 bankruptcy protection on November 19, 2018. The company missed a large debt interest payment back in October, and announced the prospective bankruptcy shortly thereafter.
The bankruptcy is not a liquidation, but a debt restructuring, and there are currently no plans to close any of the chain's 300 locations. The company announced that the bankruptcy would allow it to significantly reduce debt and free up capital, getting rid of $400 million in debt and injecting much-needed operating funds back into the business.
Chief Executive Officer Scott Key announced in a statement that the restructuring support agreement the company entered into will allow them to continue being the nation's leading bridal and special occasion retailer. According to Key, "the restructuring plan is the culmination of extensive discussions with our lenders, noteholders and equity holders, and it provides an expedited path to significantly reduced debt and enhanced financial flexibility."
The debt restructuring has already raised approximately $40 million in new financing from loan lenders. That will allow the company to invest funds in its stores in time for the holiday engagement "bump" that occurs around this time annually. After all, experts report that Christmas Eve and Christmas day are the two most popular days of the year to pop the proverbial question.
The Chapter 11 bankruptcy was filed on November 19, 2018. Now that it is filed, the bankruptcy plan needs approval from the U.S. Bankruptcy Court before it can proceed.