Following a missed debt payment in October on $270 million in unsecured notes, America's largest bridal-chain, David's Bridal, has begun a pre-packaged financial restructuring by initiating a voluntary Chapter 11 bankruptcy reorganization

The company will remain in operation during the restructuring which will cut outstanding debt by more than $400 million out of its overall debt load of $760 million, according to Bloomberg

The court-supervised process is expected to be completed by early January, while sufficient liquidity remains to meet current business obligations and to maintain business as usual. 

David’s Bridal has obtained commitments for $60 million in new DIP financing from its current term loan lenders and a recommitment of its existing $125 million ABL revolving credit facility to support continued operations during restructuring. -Bloomberg

The bridal-chain missed an October 15 payment on its 7.75% unsecured notes which are due in 2020 at the request of creditors in order to allow negotiations over restructuring the company's debt could continue. The talks reportedly include the company and advisers for both loan and bondholders. 

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Based on Conshohcken, Pennsylvania and owned by private equity firm Clayton Dubilier & Rice since 2012, David's has been working with Evercore investment bank and legal counsel Debovoise & Plimpton LLP. Oaktree, which holds the lion's share of the company's $491 million unsecured and term notes, is working with financial adviser Moelis & Co. on the deal, and is represented by law firm Paul Weiss Rifkind Wharton & Garrison LLP. 

The company suffered from issues during a 2016 website redesign that dropped the search rankings of some products - while competition with Amazon and other online retailers has also added to the company's woes - resulting in a 30% drop in earnings since 2012. 

David's - which introduced new CEO Scott Key earlier this year, has struggled for a long time with declining sales and a troubled balance sheet. Analysts see a specialty retailer beset by problems in its sector, capital structure and of the company's own making. Increasing competition and "casualization" are challenging the wedding sector, according to Moody's.