Belk outlet store
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The outlet store chain Belk revealed Tuesday afternoon it prepares to declare Chapter 11 personal bankruptcy security, marking the current mall-based merchant to do so as its sales have actually decreased and obstacles have actually sped up throughout the Covid pandemic.
The North Carolina-based merchant stated it will participate in a restructuring assistance contract with its bulk owner, personal equity company Sycamore Partners, together with the holders of more than 75% of its first-lien term loan financial obligation, and holders of 100% of its second-lien term loan financial obligation.
The strategy, Belk stated, is to recapitalize its service, slash its financial obligation concern by approximately $450 million, and extend the maturities on all of its term loans to July 2025. Sycamore will maintain bulk control of Belk as part of the contract, it stated.
The business stated it has actually gotten funding dedications for $225 million in brand-new capital from Sycamore, KKR and Blackstone, together with a few of its existing first-lien term lending institutions. The merchant stated that it prepares to keep paying its suppliers which all typical service operations will continue throughout the restructuring procedure.
It wishes to exit Chapter 11 personal bankruptcy by the end of February.
“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,” Belk CEO Lisa Harper stated in a declaration.
America’s outlet store operators — consisting of Belk and its almost 300 shops mostly in the Southeast — have actually struggled as customers are not often visiting shopping centers as typically and are purchasing less garments throughout the pandemic.
Last year, Neiman Marcus, J.C. Penney, Stage Stores and Lord & Taylor declared personal bankruptcy. The latter, the earliest outlet store chain in the country, wound up liquidating and closing all of its shops. Penney directly got away that very same result after U.S. shopping mall owners Simon Property Group and Brookfield Property Partners got it.
Sycamore, a company that concentrates on customer and retail financial investments, likewise just recently acquired the Ann Taylor, Loft, Lou & Grey, and Lane Bryant females’s garments brand names out of personal bankruptcy from Ascena Retail Group.
Here’s the complete news release from Belk.
CORRECTION: This story has actually been upgraded to state Belk revealed its strategies to declare Chapter 11 personal bankruptcy. A previous variation misstated the business had actually currently submitted.