David’s Bridal plans to spin off its Pearl artificial intelligence platform into a standalone publicly traded company valued at about $350 million, with the transaction expected to complete in the first half of 2027.
The bridal retailer has filed a non-binding letter of intent to separate the business, which would take ownership of David’s Bridal’s intellectual property while licensing it back to the chain.
Kelly Cook, David’s Bridal’s chief executive, is due to become Pearl’s chief executive once the deal closes. She said the move would give the platform greater scope to attract talent and fund its expansion, while allowing the retailer to concentrate on its physical shops and core business.
“We have a fast-growing, high-margin business generating positive cash flow right now in Pearl, and going public now will help us attract the talent and give us more optionality to fuel the growth that we believe that we have,” Cook said.
Pearl provides an AI-powered wedding-planning service, a tool for managing appointments and communications, and a digital content network featuring original programming. Its technology uses information gathered about each customer to tailor recommendations.
David’s Bridal expects Pearl to achieve an earnings before interest, tax, depreciation and amortisation margin of more than 30% this year. Revenue is forecast to more than double in 2027, passing $85 million, with the business expected to be debt-free after the separation and generate positive free cash flow over the following two years.
Under the proposed structure, Pearl and David’s Bridal would continue to work together, sharing proprietary data and directing customers to each other as they progress through wedding planning.
Cook said the companies would maintain a “relationship built on reciprocity”, adding that the split would allow each business to sharpen its focus. “Pearl has earned the right to stand on its own because it’s created more value than we’ve expected,” she said.
Pearl spinoff comes amid difficult market for AI listings
The proposed listing comes as AI stocks have struggled, while the market for consumer-company flotations has remained subdued. More businesses have delayed public debuts and investor confidence in the wider AI boom has begun to weaken.
Cook said Pearl’s selling point was that it was “not AI for AI’s sake”. “Most AI companies have to find a customer,” she said. “We already have her … we have her information, and it’s less about the AI side and more about modernizing this entire ecosystem for her that desperately needed modernization.”
David’s Bridal has faced two bankruptcy proceedings, filing for protection in 2018 and again in 2023 after a slowdown linked to the pandemic and high inflation. Its business was subsequently sold to asset manager Cion Investment Corp to avoid a shutdown.
As part of the proposed separation, Cion has offered to invest $25 million as an anchor investor in Pearl.
Cook, who became David’s Bridal’s chief executive last year, said the company’s financial difficulties had helped prompt the restructuring. “What’s extraordinary is what came out of that process is a leaner David’s, a more focused David’s … I think it’s a move from strength,” she said.
