David's Bridal to spin off AI unit Pearl at $350 million valuation

David's Bridal is planning to separate its artificial intelligence platform, Pearl, into a stand-alone publicly traded company with a target valuation of roughly $350 million, according to an exclusive report by CNBC. The company expects the transaction to close in the first half of 2027.

On Thursday, David's Bridal filed a nonbinding letter of intent to execute the spinoff. Under the proposed structure, Pearl will assume ownership of David's Bridal's intellectual property and license it back to the retail chain. The division is designed to allow Pearl to expand its AI model while David's Bridal concentrates on strengthening its physical retail operations.

Kelly Cook, CEO of David's Bridal, stated that the move is intended to attract talent and provide financial optionality for growth. Cook will transition to the role of CEO at Pearl once the deal is finalized. She described the split as a strategic positioning for both entities, noting that they will continue to collaborate throughout the wedding-planning process.

Pearl's operational offerings include an agentic AI-powered wedding-planning platform, proprietary tools for streamlining appointments and communications, and a digital content network featuring original programming. The platform uses AI to personalize client suggestions based on collected data. David's Bridal projects that Pearl will achieve an EBITDA margin exceeding 30% this year. The company is also forecasting revenue growth of more than 100% in 2027, with total revenue expected to surpass $85 million. Following the transaction, Pearl is expected to be debt-free and generate positive free cash flow over the next two years.

The timing of the initial public offering coincides with a period of volatility for AI stocks and a lackluster market for consumer company debuts. Cook emphasized that Pearl's value proposition lies in modernizing an existing ecosystem rather than developing AI in isolation. She noted that the company already possesses customer information, allowing it to focus on service delivery rather than customer acquisition.

Grand View Research estimates the U.S. wedding services market will exceed $96 billion in 2026. Both Pearl and David's Bridal aim to maintain a reciprocal relationship post-spinoff, sharing proprietary data and directing customers to one another for subsequent planning steps.

David's Bridal has faced significant financial challenges in recent years, including bankruptcy filings in 2018 and 2023. The company was subsequently sold to asset manager Cion Investment Corp. to prevent closure. As part of the current spinoff agreement, Cion has proposed investing $25 million as an anchor investor in Pearl.

Cook, who joined David's Bridal last year to oversee its transition toward a cohesive online and in-store experience, attributed the decision to split the business to the lessons learned from those earlier financial struggles. She characterized the move as a step forward for a leaner and more focused organization.