After more than a century as a family-owned department store chain, Belk has agreed to sell to a New York-based private equity firm later this year for about $3 billion.
Started as a single store in Monroe in 1888, Belk now has 296 stores in 16 states. Last year’s sales totaled $4.1 billion, a jump of nearly 2 percent from the prior year. But the retail industry as a whole has stagnated as more consumers shop online.
"We look at Kohl’s, we look at Sears, we look at Bon-Ton, we look at Dillard’s, it’s a very weak business. It’s going to continue to lose more market share," says Howard Davidowitz, CEO of retail consulting firm Davidowitz & Associates. "I think the Belk management did a good job and they sold out at exactly the right time."
In April the chain announced it was partnering with Goldman Sachs to find a potential buyer.
That buyer, announced today, is Sycamore Partners, a private equity firm based in New York that focuses on retail companies. They already have stakes or control such brands as Talbots, Nine West and Aeropostal.
Belk says it will continue to operate under its own name, retain CEO Tim Belk, with no planned closures of stores or the Charlotte headquarters.
"It’s not a company that’s in crisis, it’s not a company that has to be restructured," says Davidowitz. "But with the debt that’s going to be added, suddenly it’s going to be a company losing a lot of money, so there has to be something done."
Initially, Davidowitz says that could mean selling store land, and then leasing it back.
Updated - 2:28 p.m.
