Belk gets Bought
CHARLOTTE, NC: & NEW YORK, NY: The venerable Southern department store chain Belk will ring out this holiday shopping season under its first new owner in 127 years.
Sycamore Partners said it finalized its $3 billion purchase of the Charlotte-based retail chain this week.
The deal closed Thursday, according to filings with the U.S. Securities and Exchange Commission. Shareholders led by Belk family members who controlled the bulk of the stock approved the transaction last month.
Until this week, Belk had been the nation’s largest family-owned and -operated department store, with $4 billion in annual sales at almost 300 locations in 16 Southern states.
The retailer was started in 1888 by William Henry Belk, who opened a bargain store in Monroe, N.C., with $750 in savings, a $500 loan and about $3,000 worth of goods. He called it the New York Racket because he thought it made it sound big and would attract business.
The company expanded to in downtown Charleston in 1926, when it opened at 232 King St., the current site of Belmond Charleston Place.
Belk now has four department stores throughout the region, including a “flagship” location at Mount Pleasant Towne Centre. The others are at Citadel Mall in Charleston, Northwoods Mall in North Charleston and North Main Market in Summerville.
Senior executives set the wheels in motion for a sale of the family business in August 2014, when they began to plot out a three-year operating plan while keeping in mind the mounting competitive pressures from larger and specialty retailers. During those discussions, they began informally exploring a “broad range of potential strategic alternatives” to “maximize shareholder value,” according to a summary of the events that led to the sale.
It later hired investment bank Goldman Sachs to help it evaluate those alternatives.
Sycamore, a New York-based private equity firm, emerged as the buyer. Its previous retail industry investments have included stakes mostly in specialty merchants, such as Aeropostale, Nine West, Jones New York and Talbots, among others. Belk is Sycamore’s first department store purchase — and its biggest deal ever.
Belk has said it does not anticipate any layoffs or store closings as a result of the sale. and the company will keep its Charlotte headquarters.
“Our partnership with Sycamore will contribute to Belk’s continued success, and we look forward to leveraging Sycamore’s deep knowledge of the retail market to best serve our dedicated customers and provide even greater opportunities for our valued team members” said third-generation CEO Tim Belk, who remains in the top job.
Stefan Kaluzny, managing director of Sycamore, said his firm was excited “to begin our partnership” with the retailer .
“The company has developed a loyal base of customers over its 127-year history, and we believe Belk is positioned for continued growth and success,” he said in a written statement that invoked the tag line created by the retailer’s previous owner. “We look forward to working with Belk’s management team and associates as they build on the company’s legacy and continue to serve its customers and deliver ‘Modern. Southern. Style.’”