The nation's largest family owned and operated department store chain, Belk operates about 300 stores in more than 16 states. Belk stores are located primarily in the southeastern US and offer mid-priced brand-name and private-label apparel, shoes, jewelry, cosmetics, gifts, and home furnishings. Its stores usually anchor malls or shopping centers in small to midsized markets and target 35-to-54-year-old middle- and upper-income women. Founded in 1888 by William Henry Belk, the company was acquired by Sycamore Partners in 2015 for $2.7 billion, and 2016 marked the first time the chain was run by a non-Belk family member in the shape of new CEO Lisa Harper.
Belk's store operations are organized into three regional operating divisions, with offices in Raleigh, North Carolina, Atlanta, Georgia, and Birmingham, Alabama. Subsidiary Belk Store Services provides a wide range of services, including administration and merchandising planning and allocation, to the three division offices. In addition to its retail stores, the department store chain operates the growing e-commerce business belk.com.
The company offers large assortments of products under many national brands. Its private brands include MADE Cam Newton, CYNTHIA Cynthia Rowley, Crown and Ivy, Chip & Pepper California, ND-New Directions, ND Weekend, Kim Rogers, J. Khaki, Pro Tour, SB Tech, Ocean & Coast, Saddlebred 1888, Red Camel, Nursery Rhyme, Belk Silverworks, Be Inspired, Biltmore, Home Accents, and Cook's Tools.
As of the end of fiscal 2015, Belk owned 73 store buildings, leased 159 store buildings under operating leases, and owned 80 store buildings under ground leases.
Belk owned and operated salons and spas in 18 Belk locations that specialize in the latest trends in hair, spa and relaxation services. The salons and spas offer assortments of top brand name beauty products, including Aveda, Bumble and Bumble, Redken and Pureology.
The company's non-retail businesses include the United Electronic Services division, which provides equipment maintenance services to Belk stores and third parties.
North Carolina-based Belk's department stores are located in 16 US states. Its largest markets are North Carolina, Georgia, and South Carolina, which together account for about half of all Belk stores.
Belk operates its own fine jewelry business with buying and administrative offices at the corporate office in Charlotte and a repair and distribution center in Ridgeland, Mississippi.
Sales and Marketing
Belk markets through a combination of mass media print and broadcast advertising, direct marketing, internet marketing, social media, mobile advertising, comprehensive store visual merchandising, signing and in-store special events, such as trunk shows, celebrity and designer appearances, Charity Sale, KidFest, Educator Appreciation Day, Healthcare Appreciation Day and Senior Day. Belk seeks to generate sales growth and win customer loyalty through its Belk Rewards Card Loyalty Program.
Belk has achieved historic growth over the years, with revenues peaking at a record-setting $4.1 billion in 2015. This was fueled by higher revenues from comparable stores of 1.5% (the result of a 5.2% increase in holiday sales that occurred in the nine week period ending January 3, 2015) and a $28.8 million increase in revenues from new stores.
Net income, however, fell by 16% million in fiscal 2015 due to increased cost of goods sold and asset impairment and exit costs, partially offset by increased revenues. The cost of goods sold rose due to the increased shipping and handling and fulfillment costs associated with higher eCommerce sales, and increased markdown activity due to a soft sales environment in the first nine months of the year. Asset impairment and exit costs spiked as Belk recorded impairment charges associated with the closing of eight retail locations and impairment charges primarily to adjust two retail locations' net book value to fair value.
In fiscal 2015, net cash provided by the operating activities decreased by $3.5 million primarily due to reduced net income, a change in accounts payable and accrued liabilities and accrued income taxes.
Belk was acquired by Sycamore Partners, a New York-based private equity firm, for around $3 billion. The acquisition came at a tough time for Belk and competitors
, and Sycamore hopes its experience in acquiring and re-invigorating struggling retailers will add bounce to Belk's bottom line.
Belk intends to invest $450 million over the three-year period (beginning in fiscal year 2016) on the key strategic initiatives like an omni-channel initiative and improving its shopping experience through new stores, expansions, remodels, expanded flagship strategy, information technology and supply chain initiatives.
In fiscal 2015 it completed major remodel projects in two stores, opened two stores in new markets, opened two new stores as replacements for existing stores, and completed expansions of three stores. That year it relocated its store at Regency Square Mall to a new fashion store at Atlantic North Shopping Center in Jacksonville, Florida. It also opened anew home store at Friendly Center in Greensboro, North Carolina.
It plans to continue to explore new store opportunities within its existing 16-state footprint and in contiguous markets where Belk can leverage its name and reputation to distinguish its stores from the competition, and will consider closing stores in markets where more attractive locations become available. In fiscal 2016 the company plans to open two new stores as replacements of existing stores and to complete three store and two remodels.