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Belk, the North Carolina-based department store chain that has served generations of consumers for nearly 190 years, announced Tuesday that it will file for Chapter 11 bankruptcy.
The network’s owner, privately held company Sycamore Partners, said in a press release that Belk will continue “normal operations” while it goes bankrupt, The Charlotte Observer reported.
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Sycamore Partners said it hopes to exit bankruptcy by the end of February. It will retain majority control of Belk, according to an agreement with some of Belk’s creditors. A group of department store creditors, led by the private equity firms KKR and Blackstone, will have a minority stake. The bankruptcy plan will help Belk get rid of some $ 450 million in debt.
“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 from the opening of a store in Monroe, North Carolina, by William Henry Belk in 1888. Three generations of the Belk family led the company to become the largest family-owned department store chain in the country. by 2015, when the family sold it for $ 3 billion.
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The sale to Sycamore loaded the chain with debts of more than $ 2 billion at a time when department stores were losing popularity. The department store struggled during the coronavirus pandemic as customers switched to online shopping and avoided personal shopping.
Belk laid off workers in March, when the pandemic hit and cut senior employees’ wages by up to 50% due to temporary store closures. In July, Belk cut an undisclosed number of jobs, mainly at his headquarters in Charlotte, North Carolina. This occurred after the elimination of 80 corporate jobs in February.
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Belk has more than 20,000 employees in its nearly 300 stores in 16 southeastern states. Its corporate offices were opened in 1988 in Charlotte, and now have about 1,300 employees.