One of the most renounced brands across the world for their top notch wedding dresses, David’s Bridal might fire over 9000 of their employees and shut down a few branches to save their business.
About David’s Bridal:
David’s Bridal was founded in 1950 by Steve Erlbaum. The company headquartered in the state of Pennsylvania has about 300 stores in the United States, Canada and United Kingdom combined. The brand in widely popular in the United States and is known for its wedding clothing, prom gowns, shoes, accessories and other formal clothing. The brand is appreciated for offering plus size dresses and a virtual reality three dimensional try on. Apart from the close to 300 stores that the brand runs, they also run their business online which unlike their offline stores can deliver their best dresses to over 100 countries in the world. The brand which is famous for providing high quality dresses in all price ranges has been facing trouble keeping up with their business in the recent years.
The 2018 bankruptcy filing:
This is not the first time that the brand has come across financial trouble. In the year 2018, the company filed for bankruptcy and cited major debt load as the primary reason. They were, however, able to emerge back from bankruptcy in the first month of 2019 after they received a $60 million in proceedings. Following this incident, they continued to operate both their online and offline stores. They also expanded the already wide range of their products to include more casual clothes.
The problems they might have faced:
Although it was expected for businesses similar to the brand to make huge profits after the pandemic, this was not the case with David’s Bridal. There are a number of factors that might have led the once successful brand to be on the verge of shutting down:
- The COVID-19 pandemic had significant effect on all industries and the wedding sector was no exception. With the number of cases increasing throughout the world and the lockdowns being put in place to control the spread of the virus, a lot of weddings got postponed and people called off the orders they had placed. As schools went online, students refrained from buying prom dresses which were a major source of their revenue.
- Once the pandemic ended, it left a lot of people without jobs. A series of lay offs started after the spread of the virus was controlled because of the mass hiring that took place before it. This left people in a financially uncertain situation and they refrained from buying non-essential items from their hard earned money.
- The competition between such businesses also increased post COVID because comparatively more marriages were being held. Therefore, an increased market was met with an increased supply and more creative products. The more innovative businesses might have taken the market after the pandemic making it more difficult for traditional businesses like David’s Bridal to conduct business.
The current situation:
The factors that were mentioned above might have caused a significant loss to the U.S. based clothing brand. They are currently considering selling the company to potential buyers and might shut it down as well. In a notice filed by the company in the Department of Labor and Employment in Colorado, the company revealed that it might fire over 9000 of its employees to stabilize their financial situation. It also mentioned that the layoffs that began on Friday will be done in phases till August this year. According to reports, the company might yet again file for bankruptcy. As of now, they have asked their customers to not worry about any orders that have been placed with them and have assured that all their stores, both online and offline, would continue to function for now. It is not clear whether the company will accompany the layoffs with shutting down a few branches or the entire chain altogether.