Talk of a David’s Bridal bankruptcy is heating up after the chain missed a key debt payment.
Missing a key debt payment such as this is typically the sign that a company is heading toward a Chapter 11 bankruptcy filing. However, the company does have a 30-day grace period to make the payment.
While it is still possible that a David’s Bridal bankruptcy can be avoided, the chances are unlikely. S&P Global Ratings claims as much itself and now has a lower credit rating for the company after the missed payment.
“With the assistance of our financial and legal advisors, we are engaged in discussions with our lenders in order to reach a mutually agreed upon resolution designed to strengthen our balance sheet so we can increase our financial flexibility and further invest in our business,” David’s Bridal said in a statement obtained by USA Today.
So how exactly have we reached the point that a David’s Bridal bankruptcy is a possibility? There are a couple of factors at play here. The first is that the company is seeing more competition from online retailers. The next is that marriage rates in the U.S. are on their way down. That’s two big changes hurting the company’s revenue.
The poor state of marriage rates in the U.S. may not be behind just the David’s Bridal bankruptcy. Alfred Angelo, a seller of wedding dresses, had to close up shop last year after dealing with similar struggles.
As of this writing, William White did not hold a position in any of the aforementioned securities.
