Posted at 6:08 PM ET January 26, 2021
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CHARLOTT, North Carolina – Belk, the North Carolina-based department store chain that has catered to generations of shoppers for nearly 190 years, announced Tuesday that it will file for Chapter 11 bankruptcy.
The chain’s owner, private equity firm Sycamore Partners, said in a press release that Belk would continue “normal operations” as it goes through bankruptcy, the Charlotte Observer reported.
Sycamore Partners said it expects to exit bankruptcy by the end of February. It will retain majority control in Belek, according to an agreement it reached with some of Belek’s creditors. A group of the store’s creditors, led by private equity firms KKR and Blackstone, would receive a minority stake. The bankruptcy plan will help Belk get rid of about $ 450 million in debt.
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“We are confident that this agreement puts us on the right, long-term path towards substantially reducing our debt and providing us with greater financial flexibility to fulfill our obligations and continue to invest in our business,” Belk CEO Lisa Harper said in a statement. .
The 133-year-old chain has grown since William Henry Belk opened a store in Monroe, North Carolina in 1888. Three generations of the Belk family led the company to become the largest family-owned department store chain in the country through 2015, when the family sold it for 3 billion. Dollars.
The sale to Sycamore left the chain with more than $ 2 billion in debt at a time when stores were losing popularity. The department store has suffered during the coronavirus pandemic as customers flocked to shop online and avoided personal shopping.
Belk suspended workers in March as the pandemic spread and slashed top employees’ salaries by as much as 50% with stores temporarily closed. In July, Belk cut an unknown number of jobs, mostly at its headquarters in Charlotte, North Carolina. This followed the abolition of 80 corporate jobs in February.
Belk has more than 20,000 employees in nearly 300 stores in 16 southeastern states. The company opened its offices in Charlotte in 1988 and now employs around 1,300 workers.
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