David's Bridal files Chapter 11 bankruptcy - experts weigh in on what you should know
NOVI, Mich. (FOX 2) - The Novi David’s Bridal store is one of eight in Michigan named in a Chapter 11 filing.
The company says for the moment this store and 299 others across the country will stay open - but there are some things customers should do right now.
David’s Bridal has been an industry leader when it comes to outfitting brides for their big day. FOX Business reports one of every four dresses sold is bought at David’s Bridal.
"They don’t have the income they (need) to be able to maintain their operations and pay off their debts," said Dr. Michael Greiner, Oakland University.
So on Monday afternoon, the company filed Chapter 11 bankruptcy, listing debts owed between $100 and $500 million.
"People aren’t buying wedding dresses the way that they were," Greiner said. "Things changed during the pandemic."
"They have filed for Chapter 11, they are trying to find a buyer," said Laura Blankenship, Better Business Bureau. "If they don’t find a buyer, what does that mean?"
The BBB keeps track of these filings and says whenever a business files there are things people should not wait to do.
"If you have a gift card, you should use it right away," she said.
David’s Bridal maintains they will honor them, but things can change at any time.
"If you are waiting for alterations and the dress is already in the store, go ahead and grab it," Blankenship said. "It can’t hurt just to do your due diligence there."
This is the second time the company has filed for bankruptcy, the first back in 2018.
"They’ve basically stopped the creditors from trying to tear apart the business and give them a little bit of breathing room to figure out how they will reorganize things," Greiner said. "They have this big burden of all these stores while revenues are going down at the stores themselves."
Earlier this month the Pennsylvania-based company announced it plans to lay off more than 9,000 employees over three phases from now until the end of August.