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FutureStarrWhat the Future Holds For David's Bridal After Job Cuts
David's Bridal is one of the largest wedding gown retailers in the US. According to reports filed with the Pennsylvania Department of Labor, they will reportedly lay off thousands of employees nationwide. According to their notice submitted with them will eliminate 9,236 positions nation-wide.
Conshohocken-based retailer The Home Depot Inc is currently reviewing its strategic options and selling some stores. However, others will remain open.
David's Bridal is one of the top wedding gown retailers, but after being hit hard by COVID-19 it has had to make drastic job cuts as it attempts to restructure itself. Multiple large companies have announced massive job cuts recently in an attempt at restructuring.
Conshohocken-based retailer announced it will lay off approximately 9,000 employees nationwide over the coming three months, according to a WARN notice filed with Pennsylvania's Department of Labor and Industries on Friday. Layoffs will affect 15 stores spread throughout nine counties such as Allegheny, Blair, Bucks and Montgomery Counties.
In its filings, the company reported it was reviewing its strategic options and beginning a sale process, and would lay off corporate employees as well as distribution center workers and field and store employees.
Not knowing exactly where the layoffs will occur, notices have been sent out by the company warning all employees could be affected. According to CNN Business, these mass layoffs are expected to be permanent; however, new opportunities may become available depending on how successful their sales efforts are.
Jobs at risk include wedding stylists, alteration specialists and customer service representatives. The company noted it may sell some assets or intellectual property but did not specify.
Layoffs are part of an attempt by an underperforming company to regain its footing after emerging from bankruptcy four years ago. A bridal chain has struggled to remain profitable amid falling sales and mounting debt burden.
As of January 2019, they had emerged from bankruptcy; however, due to financial losses caused by pandemic. Many couples either postponed or had smaller private ceremonies due to these struggles.
As a result, demand for wedding dresses has reached its lowest point ever and some retailers have responded by reducing prices and expanding online catalogues, while others have closed or merged altogether.
With so many jobs being eliminated, some consumers are wondering about David's Bridal. After seven decades in operation and with more companies closing or disbanding each day, their future looks uncertain.
One of the nation's premier bridal retailers is experiencing serious financial difficulty and could soon file for bankruptcy, according to media reports. According to sources close to the situation, advisers have been working on restructuring plans while thousands of employees nationwide have been let go in an attempt to save money.
Recently, David's Bridal has become an industry powerhouse, selling dresses for bridesmaids, flower girls and prom to customers nationwide. Their stores also cater to brides with budget constraints.
But David's Bridal has struggled to compete against online wedding-dress shops that make price comparison and finding better offers easier for customers, leading them to prefer them over David's Bridal stores. Therefore, David's Bridal has struggled to stay open.
Since 2011, they have seen their market share decrease as online competitors gain ground and they incur substantial debt.
As part of its restructuring efforts, David's Bridal is currently exploring options to explore a sale as part of its restructuring efforts. They have met with advisers such as investment bank Houlihan Lokey and law firm Kirkland & Ellis.
Houlihan Lokey did not respond to inquiries for comment Monday. Paul Gallagher, vice president of communications for Houlihan Lokey declined to answer whether they plan to file bankruptcy.
Meanwhile, the company informed state employment agencies of its plans to eliminate thousands of workers across the nation over the coming months, with most cuts occurring at its distribution centers and field/store employees.
Pennsylvania Department of Labor issued a WARN notice regarding these layoffs on Friday. This company operates 15 stores within its territory and employs more than 11,000 people nationwide.
Starting this week and lasting through August, Saunders revealed that his company intends to reduce its workforce by 9 percent - or 9,236 workers - as part of an effort to save money and restructure operations, in an attempt to save money and stave off bankruptcy. With less employees to employ and more revenue-generating ability provided by being smaller entities than they previously were, his cuts will hopefully provide the savings required in order for more profits and avoid bankruptcy proceedings in future years.
David's Bridal, which provides one out of every three wedding gowns sold worldwide, announced on Friday it will lay off thousands of employees nationwide over the coming months. Specifically, it informed Pennsylvania authorities of this plan by notifying them about reducing 9,236 positions across corporate employees, distribution center workers and retail locations nationwide.
David's Bridal recently issued a notice outlining its evaluation of "strategic options," including potential sales or winding-down measures that could involve selling off or winding down their company. If any Pennsylvania stores close, however, its impact on local communities and workers remains uncertain.
Under federal law, the company announced that it will provide its employees at least 60 days' notice of job cuts under federal law. Furthermore, it announced plans to file bankruptcy for the second time within five years.
Weddings are projected to experience a slight rebound this year; however, sales at stores have seen a decrease due to inflation-driven consumer caution; industry experts therefore interpret David's Bridal's massive cost-cutting measures as evidence that they are in troubled waters.
David's Bridal filed for bankruptcy protection in 2018 as it struggled with declining sales of bridal dresses and mounting debt. Since emerging from Chapter 11 protection in 2019, they have made improvements such as lower prices on certain products and a wider online catalogue.
As a result of the recession and weak economy, retailers are experiencing difficulties staying afloat. Walmart recently announced it will cut over 2,000 jobs at five warehouses nationwide while Best Buy reported cutting hundreds of store-level positions.
As opposed to other retailers, David's Bridal does not operate any stores in Colorado and so its effect on operations remains uncertain. However, the company stated it will provide at least 60 days' notice if any potential layoffs occur in Colorado.
The company did not disclose exactly how many employees in Colorado would be affected by its job cuts; however, it reported that job cuts would occur at its corporate headquarters in Montgomery County and distribution centers and stores around the country. They listed various positions that may be eliminated such as 3,597 stylists to 13 vice presidents and the CEO.
David's Bridal has announced plans to reduce employment levels and close stores nationwide as it undergoes restructuring efforts, following tightened credit conditions which have severely crippled companies. Walmart announced plans for over 2,000 workers at five US warehouses alone while Best Buy cut hundreds of store-level positions as part of restructuring initiatives.
David's Bridal has struggled to keep up with online retailers who offer more choices and often sell dresses at much lower prices than brick-and-mortar shops, according to reports in The New York Times. That has caused David's Bridal to lose more money and put added strain on its balance sheet, according to one such report.
At prom and wedding season, this poses a threat to the company as its stores near Pennsylvania -- where there are 15 in total, four in Allegheny County alone -- could close.
Recent years have been particularly difficult for bridal specialty stores due to increased competition from online retailers; as a result, David's Bridal, known for its customer service excellence, has taken steps to adapt accordingly.
As part of its 2020 initiatives, for example, they introduced a virtual stylist and appointment experience; collaborated with mobile wallet marketing platform Popwallet to offer coupons and rebates; introduced augmented reality shopping; acquired bridal tech company Anomalie; introduced more affordable bridesmaid dresses; opened prom dress pop-up shops in December etc.
However, it remains uncertain how these changes will have an effect on the business as a whole. While the company hasn't stated a definitive plan to file bankruptcy again within five years if its business doesn't recover soon enough.
According to The New York Times, the company is currently exploring if it can continue operating under new ownership, employing Houlihan Lokey, Kirkland & Ellis and BRG as consultants in this process.