Jim Marcum is predicting that the fourth-quarter of this year will be a prime time for marriage proposals, after a Covid-created lag in romance.
The company he heads, David’s Bridal, badly needs that prediction to come true.
David’s is regrouping after surviving its second bankruptcy filing in five years. It was saved from possible liquidation when one of its investors opted to purchase David’s assets and continue it as a going concern.
That decision, by CION Investment Corporation, a publicly traded business development company, reduced David’s debt load, and allowed the company to shed roughly 100 of its worst performing stores.
Marcum, who became David’s CEO in June, 2019, six months after the company emerged from its 2018 bankruptcy filing, believes the new, smaller, restructured David’s is poised to take advantage of an uptick in weddings.
Filing for bankruptcy again was “an incredibly unfortunate situation to be in,” Marcum said in an interview, “but we think we’ve done a great job in making the company leaner, more nimble, and better positioned as we emerge this time.”
Marcum’s plan to keep David’s moving forward includes continued investments in new tech, and broadening its marketing and messaging beyond bridal and into all special occasion events. Future company marketing and even new store signs will highlight the David’s part of the name, with the bridal part secondary, included as one of the many things David’s specializes in, along with prom, accessories, and shoes,
The top priority over the coming six months, Marcum said, will be to be “100% laser-focused on our customer.”
Even during the bankruptcy, he said, David’s maintained customer trust by ensuring that no brides were stranded without their dresses.
When David’s filed for bankruptcy in April, the company had 90,000 orders pending for dresses. It fulfilled all of them, Marcum said, switching orders to other nearby stores or delivering dresses directly to brides, if the store where they ordered the dress was closing.
“We were hand-holding every one of those orders all the way,” Marcum said. As a result, he believes, David’s was able to preserve the level of trust it has built with brides over the years.
David’s advantages in the industry – its 70-plus years in the bridal business, its impressive market share (the company says it sells roughly one out of four U.S. wedding dresses), and its network of 195 stores in all major markets – could also be disadvantages in terms of appealing to millennial and Gen Z brides, who often are looking for something more individualized and less mass-market.
Those young brides also are demonstrating that a good number of them are willing to buy their wedding dresses online.
Research firm IBISWorld, in a July, 2023 report, noted that revenues in the bridal store industry have been declining at an average annual rate of 1.7% over the past five years. The report blames the falling marriage rate, and the pandemic effect, for the decline.
IBISWorld also noted that brick-and-mortar bridal shops are facing increasing competition both from online bridal retailers, and from wedding dress manufacturers who are opting to sell directly to consumers.
Online wedding retailer Azazie has said it is selling an average of 5,000 dresses a day this year, following year-over-year sales growth of 130% in 2022 and 180% in 2021.
Following the 2018 David’s bankruptcy, Marcum came on board as CEO with a bold plan to modernize the company’s technology and social media presence. That plan, however, collided eight months later with the Covid-19 shutdowns which postponed lots of weddings and, Marcum believes, prevented a lot of engagements from happening.
The industry is still feeling the impact of Covid in the greatly reduced number of engagements post-pandemic, as noted by jewelry retailers such as Signet Jewelers
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When the pandemic hit, dating, and the formation of new relationships, and wedding proposals were largely put on hold, Marcum said.
While in 2021 and early 2022 David’s and others in the wedding industry were still serving couples who had already planned to marry before the pandemic hit, the number of new engagements was slowing significantly.
“Our fall of 2021 and our first quarter of 2022 were tremendous, and then it was like somebody turned the lights off,” Marcum said.
David’s can boast that the majority of U.S. brides come in contact with its brand, either through store visits or online, but those customers don’t enter the David’s universe unless they get engaged.
“The lull in engagements put an extreme amount of pressure on us, which led us to where we are now,” Marcum said.
Signet, Marcum said, is forecasting that engagements will pick up in the fourth quarter – the most popular season for proposals. He is counting on that to boost David’s sales in 2024.
The 195 stores that remain open following the bankruptcy and CION transaction are the stores that had been generating the most profit for the company.
In the 2018 bankruptcy, “David’s really never dealt with some of its smaller-volume, secondary market stores, ones that I would call borderline,” Marcum said. This time, he said, the company was able to shed those stores while keeping the most productive stores.
The 195 remaining stores represented 90% of David’s four-wall store profit, but were only two-thirds of the store base, Marcum said.
“We feel very good about where we’re positioned right now, and now we’re focused on execution,” he said.
Marcum is confident about 2024 and David’s future, but it sounds like he also will need some help from Cupid this October, November, and December.
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