UPDATE: October 17, 2018: In a statement to Retail Dive, a spokesperson for David’s Bridal described the missed interest payment as a “strategic decision” and said: “Our financial outlook is strong and we have ample liquidity to meet our key business objectives today and in the future.” The spokesperson added that talks with lenders “are continuing in good faith and have been constructive” and are aimed at reaching “a mutually agreed upon resolution designed to strengthen our balance sheet so we can increase our financial flexibility and further invest in our business.” In the meantime, the company does not expect “this process to materially impact our business or interfere with day-to-day operations or our relationships with vendors and customers.”
- David’s Bridal missed an interest payment on $270 million in unsecured notes, according to a Tuesday press release from S&P Global emailed to Retail Dive. The ratings agency downgraded the apparel retailer’s credit rating to a level indicating selective default. David’s Bridal did not immediately reply to Retail Dive’s request for comment.
- The missed payment sets into motion a 30-day grace period with debtholders before the retailer is fully in default.
- S&P analysts said in the release they believe David’s Bridal is “highly unlikely” to make the debt payment as the company tries to preserve its liquidity. They added that a debt restructuring “either out of court or through a court reorganization” is “likely in the near future.”
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