Belk Reduces Debt As New Owners Take Over
Regional department store chain Belk has completed a “value-maximizing deleveraging transaction” that company officials said is a pivotal milestone for the retailer.
Through the deleveraging transaction with its first and second lien lenders and equity sponsor, Sycamore Partners, Belk reduced its outstanding debt by more than $950 million. Additionally, the company amended its existing asset-based credit facility to extend the maturity date to July 2029 and secured approximately $485 million in new capital, including $275 million of secured term loans and a $210 million securitization facility secured by revenue streams from the retailer’s loyalty credit card program.
Belk officials said the transaction is the result of Sycamore’s efforts with Belk’s lenders to significantly deleverage the company’s capital structure, preserve thousands of jobs, and provide the business with additional liquidity to expand national vendor partnerships.
“Today’s announcement marks a pivotal milestone for Belk as we move into the future with a capital structure that positions our business for sustainable, long-term growth and profitability,” said Don Hendricks, CEO of Belk. “We are confident that our stronger balance sheet will enable us to build on the momentum and growth we’ve seen in recent quarters, better serve our customers and their communities and be an even stronger partner to our vendors.”
Through this transaction, certain of Belk’s existing lenders, including funds associated with KKR and Hein Park, will have a controlling interest in the business, as the company continues to execute its strategic plan and drive growth.
Charlotte-based Belk, Inc., a privately-owned department store, opened its first store in 1888. Today, retailer serves customers at nearly 300 stores in 16 Southeastern states, at belk.com and through the mobile app.
