Belk to restructure through Chapter 11
The Belk stores in Franklin, Suffolk and Williamsburg will remain open as the popular department store chain undergoes financial restructuring through Chapter 11 of the U.S. Bankruptcy Code.
Based in Charlotte, N.C., Belk announced in a statement on Jan. 26 that the store chain would undergo what it called a Restructuring Support Agreement with the company’s primary owner, Sycamore Partners. The plan is to “recapitalize the business, significantly reduce debt by approximately $450 million and extend maturities on all term loans to July 2025.”
There will be an investment of $225 million in Belk from Sycamore Partners as well as investment firms KKR and Blackstone Credit. The latter two and other lenders will get a minority ownership in Belk; Sycamore Partners will keep its majority control.
Caroline King, a spokeswoman, said the companies are not able to comment on Belk’s total debt.
She added that not only will store operations continue uninterrupted, but also there’s to be no layoffs.
“Belk has a 130-year legacy of providing quality products at great prices,” stated Belk CEO Lisa Harper. “Like all retailers navigating COVID-19, our priority has been the safety of our associates, customers and communities. As the ongoing effects of the pandemic have continued, we’ve been assessing potential options to protect our future. We’re confident that this agreement puts us on the right long-term path toward significantly reducing our debt and providing us with greater financial flexibility to meet our obligations and to continue investing in our business, including further enhancements and additions to Belk’s Omni channel capabilities.”
The company aims to complete the restructuring by the end of February.