It's wedding bells for David's Bridal Inc. and Los Angeles-based Leonard Green & Partners, which is buying the discount wedding attire chain from Federated Department Stores Inc. for $750 million, the companies said Friday.
In addition to the 269 David's Bridal stores, the purchase includes David's upscale sister, the 10-store Priscilla of Boston chain. Federated also is selling its 511 After Hours Formalwear stores to Men's Wearhouse Inc. of Houston for about $100 million. The transactions are expected to close early next year.
Federated had been planning to divorce its bridal division ever since the Cincinnati-based retailer acquired May Department Stores Co. last year. The sale allows Federated to bring down its debt and begin buying back shares earlier than had been expected, Oppenheimer & Co. retail analyst Bernard Sosnick said.
But it's unclear whether investment firm Leonard Green, which didn't return calls seeking comment, has found a good match. In the $375-million wedding gown market, a surfeit of discount stores and interest in couture gowns has many brides turning up their noses at David's $99 dresses.
"The bridal industry is growing," said Kyle Brown, executive director of the Bridal Assn. of America. "But the lower-end market is oversaturated."
David's Bridal, which offers gowns from $99 to more than $1,000, accounts for roughly 3% of the market, Brown said.
About 80% of brides shop at independent boutiques for their dresses and on average spend about $1,700 for a dress, Brown said. He expects that figure to grow to $1,824 next year.
That increase isn't just a blip.
"We're seeing more people spend more money on a dress," said Millie Martini Bratten, editor-in-chief of Bride Magazine.
This comes as designers such as Oscar de la Renta enter the market and offer couture wedding dresses for fashion-conscious brides. Entry-level couture dresses start at about $3,000, Bratten said.
She sees two kinds of brides: the one who wants to find a dream dress, "and then there's the bride who knows she wants a white dress but is more interested in a fabulous band."
The penny-pinching bride isn't exactly a dream customer. Many women who don't want to spend a lot wear hand-me-downs or follow the example of Bethann Chordas, a Virginia bride who bought her dress at a salvage store for $10.
The industry is wishing for more free-spending shoppers like Paola Ruiz, 28, a soon-to-be bride who lives in Westminster. Ruiz started looking for a dress at Alfred Angelo, a discount store, but didn't like the dresses' fabric.
Stores like Alfred Angelo and David's Bridal "just seem like wedding factories to me," Ruiz said. "They just felt cheap."
Ruiz fell in love with a $8,200 Reem Acra designer dress that she eventually bought at the bargain price of $5,400 -- more than double her budget. She plans to resell it after her wedding.
"Individuality really matters," said Theresa DiMasi, editor-in-chief of Brides.com. "A lot of people want their dress to be a certain way."
David's Bridal hasn't ignored the designer trend, DiMasi said. The chain has introduced gowns that cost around $1,000 by designers such as Oleg Cassini and Monique Luo to entice the bride in love with labels.
It will have to compete with mid-range stores, including J. Crew and Ann Taylor, which have recently gotten into the bridal gown game. Those stores sell dresses for a few hundred dollars.
Still, Leonard Green & Partners can take heart that there will always be brides like 24-year-old Charlotte-Ann Bulow of Los Angeles. She bought her dress, which she said is "perfect," on sale at David's Bridal for $400.
"The dress is important, but food and location are more important," said Bulow, who is getting married in September. "If your dress is made out of silk instead of polyester, no one will notice, but if your food is horrible and you get married in the back of an alley, people are going to remember that."