Regional department store chain Belk has entered into a Restructuring Support Agreement (RSA) with its majority owner Sycamore Partners on a plan to recapitalize the business and significantly reduce debt by approximately $450 million.
Under the terms of the RSA, Sycamore will retain majority control of the company. The retailer has received financing commitments for $225 million in new capital from Sycamore Partners, leading global investment firms KKR and Blackstone Credit, and certain existing first lien term lenders.
Belk officials said the infusion of new capital is expected to support the company’s continued investment in strategic initiatives, including delivering a seamless omnichannel shopping experience and expanding its product offerings in home goods, outdoor and wellness.
“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,” said Lisa Harper, Belk CEO. “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 omnichannel capabilities.”
Based in Charlotte, N.C., the privately-owned department store opened its first store in 1888. Today, Belk has 300 stores in 16 Southeastern states.