David's Bridal and Bed Bath & Beyond lose grip on wedding industry

Chain retailers are losing their grip on weddings as engaged couples make alternative plans for gowns and gifts.

Why it matters: The very things that for decades helped big-box chains like David's Bridal and Bed Bath & Beyond dominate the wedding industry — their significant floor space and massive inventory — have turned into liabilities in the digital age.

Driving the news: David's Bridal filed for Chapter 11 bankruptcy protection Monday — its second filing in five years — with plans to cut more than 9,000 workers, or about 90% of its workforce.

• Meanwhile, Bed Bath & Beyond, whose wedding registries were once ubiquitous, is also in a fight for its life.
• Bed Bath narrowly avoided filing for bankruptcy in February after obtaining a last-minute injection of capital but is still considered a risk to go broke.

State of play: David's Bridal, which did not respond to a request for comment, said in a court filing that it still sells about 1 in 4 wedding dresses in the U.S.

• But while the company blamed the pandemic's lingering negative impact on weddings, it also acknowledged a changing competitive landscape.

Zoom in: David's Bridal has been "facing escalating competition from traditional online retailers and other pure-play clothing retailers, as an increasing number of brides are opting for less traditional wedding attire, including thrift wedding dresses," CEO James Marcum said in a court filing Monday.

• In response, the company in 2022 bought one of its most promising digital competitors, Anomalie, which sells customized dresses.

In reality, digital competitors had been making headwinds even before COVID struck by offering inclusive sizing, customized dresses, speedy delivery and good deals, Vogue Business reported in 2019.

What they're saying: "David’s Bridal is somewhat impersonal and doesn’t always match the standards of boutiques and independent bridal retailers," GlobalData retail analyst Neil Saunders tells Axios in an email.

• In the same vein, "Bed Bath & Beyond’s wedding services are very functional and registry areas in some stores look more like the waiting area in a bus station," Saunders adds.

Threat level: Bankruptcy and weddings make for a toxic union, as evidenced by the 2017 demise of a chain called Alfred Angelo Bridal, which caused a panic when it suddenly started liquidating.

• Before customers could take action, landlords changed the locks on Alfred Angelo stores, making it impossible for numerous brides to get their dresses.
• "All the brides stormed the stores," Patricia Redmond, a bankruptcy attorney who represented Alfred Angelo, tells Axios. "A lot of the brides would look into the window and they could see their dress in the back" but couldn't get to it.
• All but one of David's Bridal 294 stores are leased, according to a court filing.

Hence why David's Bridal was very careful when it filed for bankruptcy to reassure customers that they'll get what they paid for.

• The company's press release title made it clear, noting that "Stores Remain Open and Orders are Fulfilled" while the company pursues a buyer.
• It's critical that the company maintains confidence among its customers during the critical sales period that Marcum called “Bridal Christmas” — January through May.

Yes, but: In a liquidation scenario, anyone who has ordered a product from a retailer but hasn't yet taken delivery risks becoming an unsecured creditor, Redmond says.

• "You would have a priority claim, but to the extent that the assets of a particular company are fully encumbered by a secured creditor priority claim, there’s not too much left over" for customers, Redmond says.
• Marcum said in a court filing that David's Bridal will turn to an "orderly liquidation" if it can't find a buyer — and the company has already hired liquidator Gordon Brothers Retail Partners to handle the process if necessary.

The other side: Not all chains are losing ground in wedding retail.

• Signet Jewelers, the owner of Kay Jewelers and Zales, recently raised its annual revenue target, saying it expects to capitalize on a resurgence in weddings, Bloomberg reported.
• And Tailored Brands, the owner of wedding-tuxedo-selling Men's Wearhouse and Jos. A. Bank, survived its 2020 bankruptcy filing, though it closed hundreds of locations along the way.

The bottom line: 2023 is a make-or-break year for some of the wedding industry's household names.