David’s Bridal, the bankrupt wedding gown retailer, has received court approval to sell its business to asset manager Cion Investment Corp. in a no-cash transaction. This deal will allow 195 stores to remain open and avoid a complete shutdown. US Bankruptcy Judge Christine Gravelle stated that the employees, landlords, and creditors would be better off under new ownership rather than a full liquidation. David’s Bridal’s main goal in bankruptcy was to find a buyer that could preserve its business. Out of 62 potential buyers, only two offers were received besides the Cion bid. The other bidders were interested in buying David’s Bridal’s brand name and intellectual property without acquiring the stores or inventory, offering no more than $250,000 in cash. Gupta, David’s Bridal’s financial adviser, expressed uncertainty about other viable options and the resources required for a liquidation of the business. With the Cion sale, David’s Bridal can continue as a scaled-down business, preserving about two-thirds of its stores and maintaining jobs for 7,000 of its 10,000 employees. The bankruptcy sale also significantly reduced the company’s debt from $256.9 million to $50 million. The company filed for bankruptcy in April, citing the impact of the COVID-19 pandemic, decreased wedding dress demand, and inflation. Throughout its 70-year history, David’s Bridal has dressed 70 million brides, with approximately 25% of US brides opting for their gowns.
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