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Belk, a North Carolina shopping center chain that has been providing for generations of buyers for nearly 190 years, announced Tuesday that it will file Chapter 11 bankruptcy.
The chain’s owner, private equity firm Sycamore Partners, said in a news release that Belk would continue ‘normal operations’ in the event of bankruptcy, reports The Charlotte Observer.
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Sycamore Partners said they would come out of bankruptcy by the end of February. It will retain majority control over Belk, according to an agreement it reached with some of Belk’s creditors. A group of department store creditors, led by private equity firms KKR and Blackstone, will acquire a minority stake. The bankruptcy plan will help Belk pay off about $ 450 million in debt.
“We are confident that this agreement will put us on the right long-term path to significantly reduce our debt and provide greater financial flexibility to meet our obligations and to continue investing in our business,” said Lisa Harper, CEO head of Belk, said in a statement. .
The 133-year-old chain grew with 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 store chain in the country by 2015, when the family sold it for $ 3 billion.
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The sale to Sycamore charged the chain with more than $ 2 billion in debt at a time when the stores were becoming popular. The department store struggled during the coronavirus pandemic as customers flocked to online shopping and avoided personal shopping.
Belk disregarded workers in March when the pandemic paid senior staff up to 50% because the stores were temporarily closed. In July, Belk cut an unknown number of jobs, mostly at his headquarters in Charlotte, North Carolina. This follows the elimination of 80 corporate posts in February.
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Belk has more than 20,000 employees in its nearly 300 stores in 16 Southeastern states. The business offices were opened in Charlotte in 1988 and now have about 1,300 employees.