Belk is busy bulking up. Already the nation's largest family owned and operated department store chain, Belk operates about 300 stores in more than 15 states, following its purchase of the Parisian chain from Saks. Previously, Belk acquired Saks' McRae's and Proffitt's divisions. 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 chain is run by chairman and CEO Thomas Belk.
North Carolina-based Belk's department stores are located in 16 states. Its largest markets are North Carolina, Georgia, and South Carolina, which together account for about half of all Belk stores.
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 a growing e-commerce business belk.com (relaunched in 2008).
Belk's revenue grew 2% in fiscal 2014 (ended January) versus the prior year, to $4 billion, a sales record for the department store chain. Same-store sales increased 3% on strong online sales and progress on Belk's key strategic initiatives. E-commerce sales increased by $57.5 million, or 43% year over year. Indeed, online sales have more than doubled over the past two years and are a growth driver for Belk, which saw its store count decline by four locations over the same period. Fiscal 2014 marked the fourth consecutive year of increasing sales for Belk, which appears to have left the dark days of the Great Recession -- during which it lost sales to discount chains -- behind it.
Operating income declined to $288.3 million in fiscal 2014 compared with $399.9 million in fiscal 2013. Net income also fell 19% to $158.5 million on lower margins and higher expenses, such as the company's investments in a new IT platform and new merchandising system.
Declining consumer spending during the financial crisis brought a decade of expansion -- driven primarily by acquisitions from Saks -- at Belk to a halt. Rather than increase its store count, Belk has focused on remodeling and expanding existing stores, developing new merchandising concepts, and enhancing its online business. As a result, it's become a more efficient retailer, with store sales per square foot increasing from $143 in fiscal 2010 to $179 in fiscal 2014. In fiscal 2014 the company closed two stores, yet increased its overall sales. Belk's updated image campaign (launched in 2010) under the tagline: Modern. Southern. Style is meeting with some success. Like its competitors Macy's and J.C. Penney, Belk has focused on exclusive private-label merchandise to attract and retain customers. The retailer also launched its own fine jewelry business under the "Belk and Co. Fine Jewelers" name and operates jewelry departments under that brand in about half of its stores. Also like Macy's, Belk has undertaken a strategic initiative to improve its merchandising and planning organization to make it more responsive to local markets.