Charlotte-Based Belk To File For Bankruptcy, But Says Stores Are ‘Here To Stay’
Belk plans to file for Chapter 11 bankruptcy, but the Charlotte-based chain says it plans to keep its department stores open.
The news was announced Tuesday by Sycamore Partners, which owns Belk. The company expects “operations to continue as normal” through the financial restructuring transaction, which could be complete by March. Through the plan, Belk would unload $450 million in debt and could get about $225 million in new capital from Sycamore.
Greetings,— Belk (@belk) January 26, 2021
Please do not worry, we can assure you our Belk stores are here to stay and do not intend to close. Thank you for choosing Belk. Have a lovely day! 😁
A changing retail landscape and shift to online sales in recent years have hurt many department-store chains and malls. The COVID-19 pandemic has amplified that. In 2020, Neiman Marcus and J.C. Penney were among two major department store chains to file for bankruptcy.
"Like all retailers navigating COVID-19, our priority has been the safety of our associates, customers and communities,” Belk CEO Lisa Harper said in a statement. “As the ongoing effects of the pandemic have continued, we've been assessing potential options to protect our future. We're confident that this agreement puts us on the right long-term path toward significantly reducing our debt and providing us with greater financial flexibility to meet our obligations and to continue investing in our business, including further enhancements and additions to Belk's omnichannel capabilities."
Belk was founded in 1888 in Monroe and now operates about 300 stores in the Southeast. It also runs a retail website, and from 2011-2019 sponsored Charlotte's college football bowl game, the Belk Bowl. New York-based Sycamore, a private equity firm, bought Belk in 2015 for roughly $3 billion.
Belk's headquarters remained in Charlotte, and one of its flagship stores is in SouthPark Mall.
Sycamore will keep majority control of Belk under the restructuring support agreement.
Before its sale, Belk was family-owned throughout its history. The Belk family itself has been prominent in Charlotte for decades, including former Mayor John Belk and through the charitable Belk Foundation.
Their name is on the Belk Freeway and the Belk Theater. The family was active in Presbyterian causes and helped bring Novant Presbyterian Medical Center to Charlotte, local historian Tom Hanchett told WFAE in 2015.
“When the Belk stores started in the late 19th century, this was a region of pretty isolated farm communities, and what Belk did with its stores and the bing power of Belk Store Services, the wholesale arm, was to help knit together the South as the South,” Hanchett said.