Nearly a year after David's Bridal filed for bankruptcy protection, the wedding retailer is still waiting for its honeymoon.
Although the chain survived Chapter 11 – a process that has felled many struggling retailers in recent years – the company's performance in
the succeeding months was disappointing due partly to declining foot
traffic and negative cash flow.
eisengeNow, with a new CEO on board, the nation's largest wedding retailer is trying to reinvent itself as it heads into its most important period
of the year: the months immediately after the traditional rush of
engagements during the holidays.
Facing increased digital competition, David's Bridal is now allowing store-bought returns on wedding dresses for the first time, selling
larger sizes, overhauling its marketing and harmonizing its online and
store promotions.
The strategy is based on eliminating "friction points" with consumers, including "confusing and conflicting" pricing and ordering
policies, said James Marcum, who was appointed CEO in June, in an
interview with USA TODAY."I do think David's for a while lost its North
Star," said Marcum, a retail veteran who most recently served as senior
operating partner of private-equity firm Apollo Global Management.
For example, he said, the company's website was shipping wedding dresses immediately after they were purchased, while in-store purchases
took much longer to arrive. The website would offer sales that weren't
offered in stores. Store purchases were considered final, but online
sales could be returned.We've moved very quickly to change those
policies," Marcum said. Deliveries of dresses bought in stores will be
sped up, and online and offline prices will be matched.
Speed is of the essence. The company's operating performance in the four months after emerging from bankruptcy in January was "significantly
weaker than anticipated," S&P Global Ratings said in a report in
May.The ratings agency downgraded David's credit rating in the same
report from B- to CCC+ with a negative outlook.
"The negative outlook reflects our view that David's Bridal is at elevated risk of failure to service its debt obligations in the long
term as we expect poor customer traffic will pressure operating
performance and lead to added volatility," S&P reported at the time.
Marcum declined to discuss David's Bridal's financial position since the company is privately held, but he said he's comfortable with its
current mix of about 300 stores. While "continual refinements and
relocations" are possible since most of the leases are up for renewal
within five years, he said the "majority" of David's Bridal stores are
profitable.
