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'We're not going anywhere.' David's Bridal's CEO reveals what's next for the company after its second bankruptcy.

Jennifer Ortakales Dawkins   

'We're not going anywhere.' David's Bridal's CEO reveals what's next for the company after its second bankruptcy.

Ever since the Covid pandemic canceled 2020 nuptials, the wedding industry has been playing catch-up.

Depending on who you talk to, some wedding companies saw business flooding back in 2021 and 2022, while others saw more of a slow trickle. Meanwhile, younger generations are redefining the wedding altogether, tossing traditions aside and looking to TikTok to plan their weddings.

David's Bridal filed for bankruptcy in April, the second time in five years. In July, a bankruptcy judge approved the company's sale to Cion Investment Corp., in a deal that's expected to preserve 7,000 jobs and keep 195 stores open.

David's isn't the only retailer that's felt the aftermath of Covid's blow to the wedding industry. Signet Jewelers, the country's largest jeweler, has seen ring sales slump alongside a drop in engagements.

But it's David's Bridal's nimble supply chain and ability to appeal to a wide range of brides that keeps CEO Jim Marcum optimistic about the company's future, he said. He sat down with Insider to talk about the bankruptcy, subsequent sale, and the seismic shifts happening in the wedding industry.

The following has been edited and condensed for clarity.

There's been a lot going on with David's Bridal recently. How do you feel about the company and its future?

There's a lot of excitement in the company right now, actually. The teams are motivated. David's is back. We've gotten our customer-service scores of thousands of reviews a month up to 4.9 stars consistently.

During the bankruptcy, we kept our field teams intact, stayed focused on the customer. We promised the consumer that we'd deliver on every order, every dress. They stuck true to it.

Through our bankruptcy, we averaged 4.8 stars, which is kind of amazing. Now that we have this successful transaction, the morale is very high.

Through the sale, how did the company attempt to save jobs?

It was our goal all along to find that right partner that understood retail and could understand the impacts that were going on.

We did close approximately 100 stores, and we spent an extensive amount of time evaluating our real estate footprint and the ideal number of stores.

The stores that we closed represented about 10% of our four-wall contributions. Whereas the two-thirds of the stores we're going forward with, represent approximately 90%. So it's getting down to a more nimble, profitable store base.

About half the store closures were in markets where we already had stores.

Editor's note: A company representative later clarified that the stores closing represented 7% of four-wall contributions, which is a profitability metric. The stores staying open represent approximately 93%.

Have you seen changes in demand over the last couple of years because of the pandemic and how weddings are changing?

When Covid hit, there were some trends where you saw the minimony. They'd go get married in the backyard because travel was restricted. If they did have a bridal party, it was the maid of honor and not an entire party.

We've seen the bride tell us about her budget. Inflation put an economic concern on the price of her budget.

The uniqueness about David's is we have dresses in the $199 price point, and we've got dresses at $2,000. We also have a broad range of aesthetics.

We did see bridal parties constrict. On average, we would run 3.08 bridesmaids prior to Covid. We saw that dip as low as 2.6. That's coming back as the market opens up.

The pandemic taught many retailers that the just-in-time model was not beneficial for today's consumer. What did David's learn about its supply chain?

What it validated was the power of that vertical supply chain. We had factories that would shut down in one country, or restrictions in one country so we had to shift the production of raw materials from that country to another country. Then no sooner than we do that, we'd have to shift it to another country.

Delivery to the customer, we never missed. When that boat got stuck in the Suez Canal, we had dresses on it. When that boat got stuck in the Baltimore Harbor, we had containers of dresses on those ships.

We had dresses where we would put that unit back into production in a factory and 48 hours later had it on the belly of an airplane flying it into the customer.

For one dress?

For one.

And that's why, when we filed this bankruptcy, a lot of people thought I was absolutely crazy for making the claim that we would deliver on every dress, on every order, to make sure the customer had the confidence that she could continue to shop at David Bridal.

David's Bridal has a reputation as the "Walmart of Bridal." How do you feel about that name?

I don't think we could be better positioned than any retailer in this country for the segment we're in.

In what way are you better positioned?

We are targeting mass America. I've heard that comment about Walmart so many times. I challenge Walmart to be 4.9 stars in service.

We will sell more wedding dresses on a weekend than a boutique will sell, oftentimes not only in a month, but an entire season. About 25% of marriages in the United States are second marriages. Average age is over 40. And we did a significant share of that. First-time brides, their average age is a little under 30.

If you really look at our dresses, you can't get the value, price proposition, or quality anywhere at our price points.

So you're not afraid of competitors taking market share?

A lot of competitors have tried, and there are competitors out there that I respect. It is about helping that bride for her entire village. We have occasion, we have mother of the bride, we have the flower girl, we have the bridesmaids, we have gifts, we have accessories.

And then, most recently, we launched Pearl.

Yes, it's very similar to The Knot where you can plan your wedding.

Yes, so now we have wedding-planning checklists and vision boards that allow you to curate the style of your wedding. We have the registry, and now we have the vendor marketplace.

The reason we did that was we wanted to be with the bride way upfront when she first got engaged. Eighty-five to 90% of all brides will come into our funnel. They don't all buy their dresses with us. That's okay. But there's a chance if they don't buy their wedding dress with us, their bridesmaids or their mother will.

What convinced you that maybe brides would turn to Pearl instead of somewhere like The Knot that has been doing this for many years?

There's so many facets to that. The first thing brides Google when they get engaged is planning. David's is a highly recognizable name. Over half our traffic is generic traffic because it's top-of-mind brand awareness. The brides are coming in and they need information now.

The Knot's value prop is the vendors. These entrepreneurs take crazy money to get those leads. So when we designed Pearl, we took a really hard look at the economics of what we would charge a vendor to list. The majority of it is free. To us, it was about the ecosystem to offer the bride something that's of value.

Last year, everyone dubbed 2022 as the year of weddings. That worked out for some people and didn't for others. Was it a boom year for David's Bridal?

It wasn't a boom year for anybody in the industry.

So would you say that was mostly a facade?

WeddingWire published that story about 2022 being the year of record weddings in early- to mid-2021. In 2020, when all these venues shut down, there were about a half-a-million weddings disrupted. There was a scramble, and a lot of them booked into 2021.

There's only so much capacity, so the venues got really restricted. They couldn't hire labor. All those 2020 venues rolled into 2021. Then you had the Delta variants, some of those weddings rolled into 2022.

Is that why David's Bridal filed for bankruptcy this year?

We had a phenomenal 2021. We were the only ones that had the inventory when all of a sudden they wanted to get married in the backyard. But what happened is that we got to the first quarter of 2022 and right after that, 2022 was soft.

We were projecting much higher. We had the data once a bride booked an appointment. We converted her between 65 and 70%. That means she had a sense of urgency and we had the assortment. The question was what happened at the top of the funnel.

We weren't seeing any seismic shift anywhere.

Signet Jewelers has projected that engagement sales will need to grow 25% by 2026 to return to pre-pandemic levels. What does that mean for the future of David's Bridal?

The reason they believe that softening occurred is because of Covid when, all of a sudden, you either had a relationship or you didn't. You heard about all these engagements, which led to 2021 being good for us.

It takes about three years in the dating cycle to get to the engagement. They put out projections for the fourth quarter of 2023 — they think it's going to be robust and picking back up. And they've put out data projections for 2024.

If those projections are halfway true, we feel very good. We're not going anywhere.

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