The department store retailer on Monday confirmed plans to financially restructure its balance sheet through an expedited “prepackaged, one-day” reorganization. The retailer said it will file for Chapter 11 on Feb. 24, 2021, and hold a confirmation hearing on its reorganization plan the same day.
On Monday, the retailer said lenders holding 99 percent of Belk’s first lien term loan and 100 percent of Belk’s second lien term loan holders have now entered into an RSA. In addition to the debt reduction, the agreement allows Belk to raise $225 million in new capital and extend maturities on all term loans to July 2025.
Under the terms of the RSA, Sycamore Partners will retain majority control of Belk. KKR, Blackstone Credit and existing first lien term lenders will provide the new capital financing commitments. These lenders will acquire a minority stake in Belk.
After opening its first store in 1888, Belk now operates nearly 300 department stores in 16 Southeastern states, in addition to belk.com and a mobile app. In the aftermath of the Covid-19 pandemic, the retailer has been experimenting with new services. In October, it began offering same-day delivery service to attract customers who prefer the convenience of ordering online and the gratification of getting their items within hours. The launch followed a contactless curbside pickup rollout earlier in the year, which gave customers a 10 percent discount to incentivize uptake of the new offering.