- David's Bridal has hired as its new CEO James Marcum, who has a background in retail, private equity and companies in transition, the retailer said Monday.
- Marcum most recently served as senior operating partner with the private equity firm Apollo Global Management, which over the years has acquired a handful of retailers, among them Claire's and Linens 'n Things. Marcum was also interim CEO at now-defunct Circuit City when it filed for bankruptcy in 2008 as well as the (also defunct) Ultimate Electronics chain. Marcum is currently on the board of Iconix Brands.
- He replaces Scott Key, who stepped down in March together with CFO Joan Hilson, and more recently interim CEO Tom Lynch. Key had led the retailer through its recent Chapter 11.
In hiring Marcum, David's Bridal touted Marcum's experience leading companies through turnaround periods. He has "considerable experience leading retail and consumer companies through transitions, resetting strategy, building teams, and positioning companies for growth," Christine Pope, who chairs the retailer's board and is an executive at Oaktree Capital Management (which took over David's Bridal in bankruptcy), said in a statement.
Marcum has a challenge waiting for him at the retailer. Months after David's Bridal emerged from Chapter 11, which brought some relief to its balance sheet, the wedding retailer is still struggling to find its financial footing. Last month, S&P Global downgraded the company's credit rating, citing a performance that "remained significantly weaker than anticipated after emergence from bankruptcy."
Analysts with S&P went on to say that David's Bridal was at risk of failing to repay its debt, "as we expect poor customer traffic will pressure operating performance and lead to added volatility."
Along with multiple private equity acquisitions that left the retailer with hundreds of millions of dollars in debt on its books, David's Bridal is stuck in a category in upheaval. Causing pain for wedding dress sellers are casualization, fragmentation and a decline in weddings.
Along with David's Bridal's troubles, Gap Inc. has abandoned a bridal startup it had acquired, J. Crew shut down its bridal store in 2016, and bridal retailer Alfred Angelo abruptly shuttered roughly a year and a half before David's Bridal filed for Chapter 11.
Bankruptcy was meant to give David's Bridal a second chance with a reduced debt load. But the reductions may not have been enough, especially as sales remain volatile. Analysts with S&P said in May that retailer's debt levels were "potentially unsustainable based on its rapidly weakening operating performance, which makes it vulnerable to unfavorable business and financial conditions to meet its commitments in the long term."
An added concern is looming Chinese tariffs that could land especially hard on the wedding apparel sector, which sources mostly from the country.