Belk department store retailer files for Chapter 11 bankruptcy

The department store chain Belk announced on Tuesday afternoon that it filed for Chapter 11 bankruptcy protection, marking the last shopping center retailer to do so as its sales declined and challenges accelerated during the pandemic. from Covid.

The North Carolina-based retailer said it had entered into a restructuring support agreement with its majority owner, private equity firm Sycamore Partners, along with holders of more than 75% of its first-lending term debt and holders of 100% of their second-term loan debt.

The plan, said Belk, is to recapitalize its business, reduce its debt by about $ 450 million and extend the maturities of all its term loans until July 2025. Sycamore will retain majority control of Belk as part of the deal, said .

The company said it received $ 225 million in financing commitments in new capital from Sycamore, KKR and Blackstone, along with some of its existing term creditors. The retailer said it plans to continue paying its suppliers and that all normal business operations will continue during the restructuring process.

He hopes to end Chapter 11 bankruptcy by the end of February.

“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, including further improvements and additions to Belk’s omnichannel capabilities,” he said. Belk CEO Lisa Harper in a statement.

America’s department store operators – including Belk and its nearly 300 stores mainly in the southeast – have struggled as consumers do not visit malls as often and buy less clothing during the pandemic.

Last year, Neiman Marcus, JC Penney, Stage Stores and Lord & Taylor filed for bankruptcy. The latter, the oldest department store chain in the country, ended up liquidating and closing all its stores. Penney narrowly escaped that same result after American mall owners Simon Property Group and Brookfield Property Partners acquired it.

Sycamore, a company specializing in consumer and retail investments, also recently purchased the women’s clothing brands Ann Taylor, Loft, Lou & Gray and Lane Bryant from Ascena Retail Group.

Here is the full press release.