Sycamore Partners Reaches Agreement to Recapitalize and Retain Control of Belk
Belk, based in Charlotte, entered a Restructuring Support Agreement (RSA) with principal owner Sycamore Partners and lenders to recapitalize the business. The plan aims to reduce debt by $450 million and extend loan maturities to July 2025. Sycamore will maintain majority control, with $225 million in new financing from Sycamore, KKR, and Blackstone Credit. The restructuring will be expedited under Chapter 11, expected to be completed by February end. Suppliers will remain unaffected, as Belk continues normal operations while enhancing its omnichannel shopping experience.
- Reduction of debt by approximately $450 million.
- New capital infusion of $225 million from Sycamore Partners, KKR, and Blackstone Credit.
- Expected completion of restructuring by February end, ensuring continued operations.
- Majority control retained by Sycamore Partners may limit shareholder influence.
CHARLOTTE, N.C., Jan. 26, 2021 /PRNewswire/ -- Belk today announced that it has entered into a Restructuring Support Agreement (the "RSA") with its majority owner, Sycamore Partners, a private equity firm specializing in consumer, retail and distribution investments, and holders of over
Under the RSA, suppliers will be unimpaired and will continue to be paid in the ordinary course for all goods and services provided to the company. Belk plans to continue normal operations throughout its financial restructuring process. Customers will continue to receive the quality merchandise and service they expect when shopping at Belk's stores across the Southeast and online. The infusion of new capital is expected to support Belk's continued investment in strategic initiatives, including delivering a seamless omnichannel shopping experience and expanding Belk's product offerings in Home Goods, Outdoor and Wellness.
"Belk has a 130-year legacy of providing quality products at great prices," said Lisa Harper, Belk CEO. "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. 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 expects to complete the financial restructuring transaction through an expedited "pre-packaged" reorganization under Chapter 11 of the U.S. Bankruptcy Code. The company expects the transaction to be completed by the end of February.
Kirkland & Ellis LLP is serving as legal adviser, Lazard is serving as financial adviser, and Alvarez & Marsal North America, LLC is serving as restructuring adviser to Belk. Latham & Watkins LLP is serving as legal advisor to Sycamore Partners. Willkie Farr & Gallagher LLP is serving as legal advisor and PJT Partners LP is serving as financial advisor to the Ad Hoc Crossover Lender Group and O'Melveny & Myers LLP is serving as legal advisor and Evercore is serving as financial advisor to the Ad Hoc First Lien Lender Group.
About Belk
Charlotte-based Belk, Inc., a privately-owned department store, opened its first store in 1888, beginning a legacy of selling great products at great prices, treating customers like family and giving back to the community. Today, Belk serves customers at nearly 300 Belk stores in 16 Southeastern states, at belk.com and through the mobile app. For over 130 years, Belk has proudly put customers and community at the center of what they do, supporting local charities, organizations and families when they need it most.
For more information visit https://newsroom.belk.com/.
To shop, find your local store at https://www.belk.com/stores/, visit belk.com or download the Belk app in Google Play or Apple Store.
About Sycamore Partners
Sycamore Partners is a private equity firm based in New York. The firm specializes in consumer, distribution and retail-related investments and partners with management teams to improve the operating profitability and strategic value of their business. With approximately
About KKR
KKR is a leading global investment firm that manages multiple alternative asset classes, including private equity, credit and real assets, with strategic partners that manage hedge funds. KKR aims to generate attractive investment returns for its fund investors by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation with KKR portfolio companies. KKR invests its own capital alongside the capital it manages for fund investors and provides financing solutions and investment opportunities through its capital markets business. References to KKR's investments may include the activities of its sponsored funds. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR's website at www.kkr.com and on Twitter @KKR_Co.
Contacts
Belk
Jennifer Anderson
Senior Director, Communications
jennifer_anderson@belk.com
Sycamore Partners
Michael Freitag or Arielle Rothstein
Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449
KKR
Cara Major or Miles Radcliffe-Trenner
media@kkr.com
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SOURCE Belk
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