Wedding season is rapidly approaching, but one wedding retailer already has the jitters. David’s Bridal has filed for Chapter 11 bankruptcy to help it manage financial stress brought on by the pandemic and changing wedding trends.
The dress seller, which currently operates six stores in Wisconsin, clothes 1 in 4 brides across the country. However, this market dominance has not made the company a financial success. In fact, this is the second time in five years the retailer has filed for bankruptcy.
Something Borrowed, Something Blue, Something Different
In a statement announcing its filing, David’s Bridal said, “Over the last several years, we have taken meaningful strides in our transformation to fulfill the needs of the brides of today and tomorrow. We have successfully modernized our marketing and customer interaction processes and driven our retail service levels to best in class. Nonetheless, our business continues to be challenged by the post-COVID environment and uncertain economic conditions…”
It elaborated on this in its filing, claiming that, “The demand for formal wedding dresses, bridesmaid dresses, and related accessories has decreased substantially in the current environment.” It noted that, “An increasing number of brides are opting for less traditional wedding attire, including thrift wedding dresses. These shifting consumer preferences have significantly exacerbated” the company’s financial crunch.
Not Their First Time Down the Aisle
David’s Bridal is blaming their bankruptcy on external factors, but this is not the first time they have been in financial distress. The company went through the Chapter 11 process just five years ago.
They are not the only bankruptcy filers to seek relief multiple times. Although most bankruptcy filers hope they never have to see the inside of a courthouse again, many do. There is no limit on the number of times a person or organization can file for bankruptcy.
There is, however, a certain amount of time debtors must wait between filings.
- A debtors cannot file under chapter 11 or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the court or comply with orders of the court.
- Debtors who received a discharge of their debts during their previous filing must wait a few years to file again. The length of the required wait depends on which chapter of the bankruptcy code they previously filed under.
- Debtors who previously filed for bankruptcy, but did not get a discharge do not have to wait as long between filings as those who did get a discharge.
Debtors who are considering a second (or third) bankruptcy should discuss their case with an experienced bankruptcy attorney, like those at Hanson & Payne, who can advise them of their options and figure out if waiting longer to file is necessary.
Will Someone Say Yes to the Dress Retailer?
If there is a silver lining to the fact that David’s Bridal has filed bankruptcy before it is that the company has the experience necessary to keep its promise to fulfill all customer orders without disruption or delay.
And it hopes to keep taking orders and serving brides-to-be. The statement released by the company says it wants to “identify a buyer who can continue to operate our business going forward. We are determined to stay focused on our future, because we believe we have an important role in ensuring that every bride, no matter her budget, can have her perfect dress.”
This is exactly the sort of situation Chapter 11 is designed for — a company in financial trouble that has a vision for the future and wants to stay in business. If the company planned to liquidate, it would likely have filed under Chapter 7 of the bankruptcy code.
A Milwaukee Area Bankruptcy Attorney You Can Trust
Whether this is the first time your company has faced financial difficulty, or you are already familiar with the bankruptcy system, Hanson & Payne is here for you. We are a full-service bankruptcy law firm based in Milwaukee that helps debtors and creditors navigate the bankruptcy process and chart a path forward. Please contact us today to schedule a meeting.