CHARLOTTE, North Carolina –Belk, the North Carolina-based department store chain that has served 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 with “normal operations” during bankruptcy, The Charlotte Observer reported.
Sycamore Partners has said it expects to come out of bankruptcy by the end of February. It will retain majority control of Belk, in accordance with an agreement it has entered into with some of Belk’s creditors. A group of department store creditors, led by private equity firms KKR and Blackstone, will get a minority stake. The bankruptcy plan will help Belk get rid of approximately $ 450 million in debt.
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“We are confident that this agreement puts us on the right long-term path to significantly reduce our debt and provide us with greater financial flexibility to meet our obligations and continue to invest in our business,” said Belk CEO Lisa Harper, in a statement. .
The 133-year-old chain grew out of the opening of a store in Monroe, North Carolina, by William Henry Belk in 1888. Three generations of the Belk family have led the company to become the most the country’s large family-owned department store chain in 2015, when the family sold it for $ 3 billion.
The sale to Sycamore loaded the chain with more than $ 2 billion in debt at a time when department stores were losing popularity. The department store struggled during the coronavirus pandemic as customers flocked to online shopping and avoided in-person purchases.
Belk put workers on leave in March as the pandemic hit and slashed senior management salaries by up to 50% as stores temporarily closed. In July, Belk cut an undisclosed number of jobs, mostly at its head office in Charlotte, North Carolina. This followed the loss of 80 jobs in companies in February.
Belk has more than 20,000 employees in its nearly 300 stores in 16 southeastern states. Its head office opened in 1988 in Charlotte and today has approximately 1,300 employees.
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