David's Bridal taps new CEO from within
David's Bridal has named a new CEO in Scott Key, an executive vice president and general manager with the wedding apparel retailer. He replaces Paul Pressler, who has stepped down from the role but will remain as chairman of the board, according to a company press release.
Key has 25 years of experience in the industry. In his previous role at David's Bridal, he oversaw the marketing, digital and service teams. He's also had executive positions at Gap, including as brand president of the company's well-performing Athleta athleisure brand.
The bridal retailer is hobbled by debt and sagging sale sales, which led Moody's Investors Service earlier this year to downgrade its debt deeper into junk territory.
The bridal business is a tough one these days, amid changing consumer tastes and approaches to nuptials. Increasing competition and "casualization" are also challenging the sector, according to Moody's.
David's Bridal isn't the only player struggling. J. Crew two years ago shuttered its bridal effort, which had attempted to cater to a movement by more American brides who were turning away from hefty splurges for simpler styles, and last year longstanding bridal retailer Alfred Angelo also shut down. More recently, Weddington Way, acquired in 2016 by Gap, is in the midst of closing all its test stores and may or may not remain as an e-tailer.
Wedding retail is a small ($2.5 billion), highly competitive market dominated by local, independent players, according to Shelley Kohan, a professor at the Fashion Institute of Technology and fellow with Retail Next. "When focusing solely on bridesmaids dresses and accessories, the market for bridal stores shrinks to less than $1 billion," she said.
The 60-year-old retailer, owned by private equity firms Clayton, Dubilier & Rice and Leonard Green & Partners, runs 300 stores across the U.S., Canada, U.K., Puerto Rico, plus a franchise in Mexico City along with its website. But it's behind on digital investments, and a 2016 website redesign that dropped the search rankings of some products didn't help, analysts have said. It's all led to a 30% drop in the company's earnings since 2012, according to Moody's.
That's where Key comes in, having "demonstrated a deep understanding of our customer and our business, with a focus on innovation and digital transformation designed to position the brand as the leader in the bridal space," according to a statement from Pressler.
S&P Global in January also downgraded the retailer's debt ratings on the expectation that the company might restructure in or out of court. Those analysts noted at the time that the company "may not be able to refinance its debt because of weak operating performance expectations and poor market conditions."
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