Millennials have a new attitude about weddings - and it's sending bridal stores into a downward spiral
- David's Bridal has been downgraded by Moody's as sales have fallen.
- Moody's said the chain is suffering from a trend towards more casual, lower-priced wedding dresses, which has created more competition in the market.
- The popular wedding brand Alfred Angelo suffered from a similar problem before filing for bankruptcy in 2017.
Brides want to dress down on their wedding day, and it's hurting traditional bridal stores.
This week, credit rating agency Moody's downgraded its rating of David's Bridal, a 300-store chain that sells wedding and bridesmaid dresses. Moody's changed its outlook on the company from stable to negative, highlighting that on a two-year basis, both traffic and same-store sales were down.
"In our view, this is a reflection of the intense competition in the sector and casualization of both gowns and bridesmaids dresses," Moody's analyst Raya Sokolyanska wrote in a note to investors.
The average cost of a wedding hit an all-time high in 2016, costing $35,329, according to The Knot's Real Weddings Study. With costs soaring, brides have become more cost-conscious when it comes to shopping for their dresses.
This has created a demand for lower-priced, ready-to-wear dresses. Anthropologie, H&M, ASOS, and Reformation all have their own cheaper bridal collections. And as a result, traditional stores such as David's Bridal face pressure to offer similarly low-priced dresses.
But the market is now oversaturated with options.
"There are so many options for brides to shop now, and women have the option to shop for less. The market is saturated, and it gets diffused," Anne Chertoff, wedding trends expert for WeddingWire, told Business Insider.
Some stores have lost out completely. In July 2017, the popular wedding brand Alfred Angelo abruptly closed its doors and filed for bankruptcy. Alfred Angelo offered bespoke dresses and hadn't adapted to the trend of more casual wedding attire.
David's Bridal has done a better job in adapting.
"We have seen an uptick in the trend towards casualization in weddings, likely attributed to the increase in brides willing to shop online. We've certainly reflected this in our bridal assortment," a spokesperson for David's Bridal told Business Insider, referring to its range of lower-priced casual dresses costing between $39 and $400. These low-cost dresses do tend to bring a lower gross profit, however.
Chertoff said that David's Bridal's marketing strategies are another issue for the company. Increasingly, brides are using Instagram and Pinterest for inspiration and to shop boutique brands.
"A lot of people think of David's Bridal as a warehouse, but it's not. I think if they promoted themselves like some of these other stores such as Lovely Bride or Fabulous Frocks, it would increase the presence of the brand," Chertoff said.
Sokolyanska expressed a similar sentiment.
"David's Bridal would need to continue making significant investments in digital capabilities and marketing in order to reverse its market share declines of the past several years. These investments are needed to attract the bride early in her online-first research process and then provide a seamless bricks-and-clicks shopping experience," she wrote.