After Chapter 11 bankruptcy, key retailer making major changes | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

The post-pandemic years have taken a toll on retailers and forced many to rethink their strategies in the wake of evolving consumer behavior.

Consumers have been broadly cutting back on spending as inflation has remained stubbornly elevated and interest rates have soared. Not surprisingly, retail closures have been rampant, with a number of notable brands filing for bankruptcy protection following the major shutdowns that occurred in 2020.

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The wedding industry in particular took a beating during and after the pandemic. Even years later, many venues and vendors are seeing a slowdown in bookings.

The Covid-19 pandemic may have inspired lovebirds to reconsider those classic overblown affairs in favor of simpler — and far less expensive — gatherings.

Now, brides and grooms are shunning the traditional 100-plus person affair in favor of smaller celebrations or destination-based ceremonies. And with borrowing rates remaining high, couples aren’t as willing to rack up scores of debt in the course of tying the knot.

Retail giant makes big changes.

Major retailer got battered by the pandemic

The mass cancellation and postponement of weddings that occurred during and in the years after the pandemic took a toll on David’s Bridal. And while the retail giant was no doubt banking on a post-pandemic wedding boom, inflation and staggeringly high interest rates dashed those dreams completely.

David’s Bridal filed for Chapter 11 bankruptcy in April 2023 in an effort to restructure and reduce debt. At the time, the company cited waning demand for formal wedding attire as a major factor.

The company’s bankruptcy filing wasn’t surprising given the state of the wedding industry and the fact that it had announced mass layoffs around the same time. Its April 2023 bankruptcy was actually its second foray into Chapter 11, having filed previously in 2018.

David’s Bridal managed to keep around 200 of its stores open thanks to a no-cash bid from Cion Investment Corp. Cion was willing to take over not just the company’s brand name and intellectual property but also its stores and physical inventory.

David’s Bridal shifts into media and an online marketplace

With bankruptcy in its rearview mirror and a new CEO, Kelly Cook, at the helm, David’s Bridal is looking to transform from a traditional bridal retailer into a media powerhouse.

Cook is aiming to position David’s Bridal as a media company that relies on content to identify and attract customers, and then use that data to drive advertising revenue for its recently launched Pearl Media Network.

The company is also building a robust online marketplace that will rely on a network of suppliers to fulfill orders rather than focus on expanding its line of physical inventory or store footprint. And that online marketplace will go beyond traditional wedding dresses.

“The bridal dress is what we do, it’s who we are, but we are expanding the shopping side of it to include more categories…men’s suits, men’s wear, rentals, swimwear, occasion dresses, party dresses,” said Cook. “All of that is being added through a drop ship marketplace model.”

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It’s this model that should allow the business to scale very quickly — and at a much lower cost than opening new stores and expanding existing locations to allow for more inventory.

This approach marks a pivotal shift for David’s Bridal, which has clearly learned its lesson after two bankruptcy proceedings. Avoiding the expense of physical inventory and leases gives David’s Bridal a chance to strengthen its footing and balance sheet.

Although David’s Bridal serves 90% of the total U.S. bridal market, it only sells about one-third of wedding dresses. A shift toward media and online sales could help the company scale “in a way that drives profitability as fast as possible,” according to Cook.