The Belk department store chain files for Chapter 11 bankruptcy

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 channel’s owner, private equity firm Sycamore Partners, said in a press release that Belk will continue with “normal operations” as it goes bankrupt, The Charlotte Observer reported.

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Sycamore Partners said it plans to come out of bankruptcy by the end of February. He will retain majority control of Belk, under an agreement with some of Belk’s creditors. A group of department store creditors, led by private equity firms KKR and Blackstone, will secure a minority stake. The bankruptcy plan will help Belk get rid of approximately $ 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 Lisa Harper, CEO of Belk , in a press release. .

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.

US RETAIL SALES FALLED IN DECEMBER FOR THE RIGHT 3 MONTH

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 laid off workers in March as the pandemic hit and slashed senior management salaries by up to 50%, with stores temporarily closing. In July, Belk cut an undisclosed number of jobs, mostly at its headquarters in Charlotte, North Carolina. This followed the loss of 80 company jobs in February.

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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.