Belk Department Store
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According to a report by the Wall Street Journal, KKR, Blackstone and other major credit providers to Belk are in talks with the stores in North Carolina to keep it out of bankruptcy.
The report, the credit providers and the private equity firm Sycamore Partners, are getting closer to reaching an out-of-court agreement, the report reads, naming people familiar with the discussions.
Representatives from Belk, KKR and Blackstone did not immediately respond to CNBC’s requests for comment. Sycamore declined to comment.
An agreement cannot be guaranteed at this time, the Journal report warned, but Belk’s credit providers noted how the Chapter 11 bankruptcy process for a number of other retail chains proved difficult during the Covid pandemic, and some were forced to liquidate.
KKR and Blackstone hope to convert part of Belk’s $ 2.6 billion debt into equity, possibly through an out-of-court agreement that will enable Sycamore to retain an interest, the Journal said. KKR is ‘reluctant’ to take Belk to court through a bankruptcy process due to the high fees associated with the filing, the report reads.
America’s stores in the mall – including Belk and its nearly 300 stores in the Southeast – are struggling because consumers visit malls less frequently and buy fewer clothes 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, eventually liquidated and closed all its stores. Penney escaped the same outcome after U.S. mall owners Simon Property Group and Brookfield Property Partners acquired it.
Sycamore recently bought the women brands Ann Taylor, Loft and Lane Bryant from bankruptcy at Ascena Retail Group. The private equity firm also owns Staples, which last week made an unsolicited takeover bid for the ODP parent of Office Depot.