By Paul Pannone
Since eWedNewz discovered David’s Bridal was on the auction block in June owners have been quietly seeking a buyer that still has confidence in a sagging wedding industry. The challenge may be met, as Leonard Green & Partners hands off the hot-potato dress company to private-equity firm Clayton, Dubilier & Rice for a price around $900 million. Green paid $750 million in 2007; a 16.6% increase if the deal closes– and a 3.4% average return over the last five years– way below private equity expectation and standards.
Clayton, Dublier & Rice feel they can top the paltry 3.4% average return in company value realized by Leonard Green & Partners.
Sources familiar with the story say they’re amazed CDR would get into the wedding business at a time of economic challenges and an aversion towards marriage.
63% of an ongoing poll says Leonard Green is smart in dumping David’s, while 22% say it remains to be seen. 12% feel Leonard is making a mistake in selling; 3% give their feelings of the troubles at David’s Bridal ranging from poor customer service to inferior quality of merchandise. Many bridal store owners feel the dress business is saturated and under attack by offshore sources selling dresses direct to consumers and undercutting prices.
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