Belk Department Store
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The Belk shopping mall chain announced on Tuesday afternoon that it had filed Chapter 11 bankruptcy protection, which is the latest mall-based retailer to do so, as sales have declined and accelerated challenges during the Covid pandemic.
The North Carolina retailer has said it has entered into a restructuring agreement with its majority owner, private equity firm Sycamore Partners, along with the holders of more than 75% of its first-term mortgage debt and holders of 100% of its mortgage debt on the second retention period.
According to Belk, the plan is to recapitalize his business, reduce his debt burden by about $ 450 million and extend the term of all his term loans until July 2025. Sycamore will retain majority control over Belk as part of the agreement. .
The company said it had received $ 225 million in financing commitments for new capital from Sycamore, KKR and Blackstone, along with some of the existing lenders for the first lien. The retailer said it intends to continue paying its sellers and that all normal business operations will continue during the restructuring process.
It hopes to leave the bankruptcy of Chapter 11 by the end of February.
“We are confident that this agreement will put us on the right long-term path to significantly reduce our debt and offer us greater financial flexibility to meet our obligations and to continue investing in our business, including further improvements and additions. to Belk’s omnichannel capabilities, “Belk CEO Lisa Harper said in a statement.
America’s stores – including Belk and its nearly 300 stores in the Southeast – are struggling because 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, 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, a firm specializing in consumer and retail investments, also recently acquired clothing brands Ann Taylor, Loft, Lou & Gray and Lane Bryant from bankruptcy of Ascena Retail Group.
Here is the full press release.