Belk department store
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The Grand Belk chain of stores announced on Tuesday afternoon that it had filed for bankruptcy protection in Chapter 11, marking the most recent retailer to do so as its sales fell and challenges accelerated during the Covid pandemic. .
The North Carolina retailer said it has entered into a restructuring support deal with its majority owner, private equity firm Sycamore Partners, along with holders of more than 75% of its first-term loan debt and 100% holders. from its second-term loan debt.
The plan, Belk said, is to recapitalize its business, reduce its debt burden by about $ 450 million and extend the maturity of all term loans through July 2025. Sycamore will retain majority control over Belk as part of the agreement, he said. .
The company said it has received financing commitments for the new $ 225 million capital from Sycamore, KKR and Blackstone, along with some of its existing prime creditors. The retailer stated that it intends to continue to pay its sellers and that all normal business operations will continue during the restructuring process.
He hopes to leave the Chapter 11 bankruptcy by the end of February.
“We are confident that this agreement puts us on the long-term path to significantly reducing our debt and giving us greater financial flexibility to meet our obligations and continue to invest in our business, including further improvements and capacity additions. Belk’s omnichannels, “Belk CEO Lisa Harper said in a statement.
American department store operators – including Belk and its nearly 300 stores, mostly in the Southeast – have struggled because consumers don’t frequent malls as often and buy fewer 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, ended up liquidating and closing all its stores. Penney escaped the same result after US mall owners Simon Property Group and Brookfield Property Partners bought it.
Sycamore, a consumer and retail investment firm, also recently bought the women’s clothing brands Ann Taylor, Loft, Lou & Gray and Lane Bryant from the bankrupt Ascena Retail Group.
Here is the complete press release.