While many businesses grapple with slimmer margins and declining revenue as they face higher tariff costs to import goods into the U.S., wedding dress retailer David’s Bridal says it’s profiting from the policy shift.
“I’m going to be the only person that’s going to answer it this way: Tariffs helped us,” David’s CEO Kelly Cook tells CNBC Make It.
Because David’s owns nearly 40 manufacturers around the world, the company has been able to turn its supply chain into an additional revenue stream, Cook says. Since President Donald Trump announced higher tariffs on April 2, Cook tells CNBC Make It the company has signed nearly a dozen deals with other businesses looking to produce their goods in David’s factories located in countries with lower tariff duties.
“There are people that are winning,” says Brian Pacula, a partner in supply chain practice at business and technology consulting firm West Monroe. Just over one-third of U.S. companies say they are experiencing positive effects from tariffs, according to a survey released by the firm in June.
It’s hard to pinpoint exactly which types of businesses are benefiting from tariffs, but Pacula says companies that primarily manufacture in the U.S. or have sources of supply outside of countries that have higher tariff levies are better situated to weather the tariff storm.
David’s Bridal is among a small group of companies benefitting from tariffs, but for most large corporations and small businesses, tariffs are creating significant strain, experts and entrepreneurs tell CNBC Make It.
The impact of tariffs varies depending on where businesses choose to source materials and manufacture their products. On Aug. 7, updated tariff rates took effect on dozens of countries, ranging from 10% to 41%. The current U.S. tariff rate on Chinese imports stands at 30%, but it peaked at 145% in April and could return to that level in November.
‘In the right place at the right time’
David’s Bridal manufactures 90% to 95% of its inventory in-house, the company told CNBC in March. Cook says the company’s design and production centers around the world produce more than just wedding dresses for the brand — they also make suitcases, men’s suits, bathing suits, shoes and home textiles.
When Trump announced plans to implement tariffs, many businesses that primarily manufactured in China began looking for alternative locations with lower tariff rates, like Vietnam and Sri Lanka, where David’s Bridal already had established factories, Cook says. Goods imported from both countries currently face a 20% tariff.
“We’ve been in multiple countries for many years, and we did it simply to manage costs,” and now it’s a move that’s paying off, Cook says.
David’s Bridal, which emerged from a second bankruptcy two years ago, did not disclose how much the added business will affect revenue for the year, but a spokesperson for the company says it’s “positively impacting the company’s revenue stream and profit margins for 2025 and 2026.”
“We were in the right place at the right time,” Cook says. “We actually have more demand [from outside brands] than my team can keep up with right now … It just sort of blew up and took off.”
Smaller businesses in particular are taking a hit
Smaller businesses — which generally have less cash flow and lobbying power — are left especially vulnerable, entrepreneurs and experts say. Some have had to lay off staff and cut salaries to stay afloat, and others are at risk of closing their companies altogether because they can’t pay their bills at the border, small business owners recently told CNBC Make It.
Even large brands are taking a hit: Activewear brand Nike estimates it will incur an additional $1 billion in costs due to Trump’s tariffs, the company’s chief financial officer Matthew Friend said on an earnings call in June.
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Like David’s Bridal, some businesses say they are searching for new revenue streams to offset the cost of tariffs. Nearly 1 in 5 business owners say they have pivoted or launched a new business in direct response to rising tariffs, investing an average of $20,000 to do so, according to a recent survey of 250 business owners conducted by Clarify Capital.
That’s no easy task, says Busy Baby CEO Beth Benike, whose company manufacturers baby mats and teething toys in China. Recently, she started making a small amount of money letting two other companies store their goods in Busy Baby’s Minnesota warehouse, she says.
“We’re bringing in additional revenue that’s helping us stay afloat,” she says. “People are looking to the Midwest to move their warehousing … We have lower expenses, so we can charge less.”
However, that extra revenue is only a drop in the bucket, she says. The warehouse is making roughly $10,000 each month, and $7,000 of that goes toward rent, Benike estimates. She is in talks with other companies who want to use her warehouse, but if the current tariffs on imported Chinese goods stay in place, Busy Baby will add a 10% tariff surcharge at checkout by the end of the year, she says.
Prices are still going to increase for consumers
Whether businesses continue sourcing from foreign suppliers facing tariffs or shift to more expensive domestic producers, production costs will rise, and those costs will be passed along to the consumer, Pacula says.
Some small businesses, like Busy Baby, and large businesses, like Walmart, say they will have to raise prices to keep running. As a result, tariffs could cost U.S. households an additional $2,400 on average in 2025, estimates The Budget Lab at Yale University, a nonpartisan research center.
If businesses don’t pass along their increased costs to their customers, “it’s going to come through and lower margin, lower [earnings], lower share price, etcetera,” Pacula says. “It’s either hitting our 401(k), or it’s going to hit us right now as we go to the checkout counter.”
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