Reuters broke news of the potential deal on Thursday.
The 127-year-old chain operates 297 locations in 16 states, primarily in the South, as well as an online store. At the time, Macy’s was expected to be contacted, but many analysts were skeptical the retailer would segue from its new and highly publicized non-department store growth strategy, and pointed to private-equity firms as more viable suitors.
Now Sycamore is finalizing financing, Reuters said, but it’s not the only firm interested in investing in Belk: Bain & Co. and KKR & Co. have considered making a play, too, and the company, currently in its third generation of Belk family leadership, is expected to make a decision later this month.
While Belk reported its fifth consecutive year of positive comparable store sales in 2014, it saw profits slide from $158.5 million the previous year due to higher expenses associated with new store openings, expansions and remodels as well as an enhanced omnichannel effort. The retailer is projected to have annual earnings before interest, tax, depreciation and amortization this year of around $400 million.
Sycamore, meanwhile, has been busy building its portfolio of retail brands, which currently includes Aeropostale, Talbots, Nine West, Anne Klein and Easy Spirit. Earlier this year the firm failed to secure financing to purchase Express and abandoned its pursuit of Chico’s. Last year it closed a $2.5 billion funding round to focus on new investments.