David’s Bridal escapes closure through no-cash acquisition

Wedding gown retailer David’s Bridal has received court approval to sell its assets to Cion Investment Corp via a no-cash transaction that will allow the brand to avoid a total shutdown.

The American chain filed for Chapter 11 filing status in April after its CEO James Marcum stated that the “business continues to be challenged”.

It came just five years after the company had first filed for bankruptcy, however its latest driving factor was down to the post-pandemic economic climate.

Now, US bankruptcy judge Christine Gravelle has approved the sale of its assets during a court hearing in New Jersey, Reuters reported.

Gravelle ultimately determined that employees, landlords and creditors would be better off under new ownership than in full liquidation.

Following its filing, David’s Bridal had said that it was aiming to identify a buyer who could continue to operate the business going forward.

The deal with Cion will see the company keep its 195 stores open, with the firm also having agreed to pay certain debts and professional fees incurred during the bankruptcy process.

Cion was among just two parties that made a bid on the struggling retailer, according to a testimony from David’s Bridal’s financial advisors, with the other believed to have offered to only buy the brand name and intellectual property, excluding its store network.

Meanwhile, with Cion, David’s Bridal can continue as a scaled-down business, preserving two-thirds of its stores and allowing the majority of its employees to keep their jobs.