Sycamore bags Belk for $3bn, has big growth plans and says omnichannel is key
By Petah Marian

The most famous names in US department store retailing should watch out after the biggest news to hit the sector this year – the …

Aug 25, 2015
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Belk has been acquired by Sycamore Partners
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The most famous names in US department store retailing should watch out after the biggest news to hit the sector this year – the Belk brand has been taken over and could be heading north.

The successful southern US department store chain has been acquired by New York-based private equity company Sycamore Partners in a $3bn deal that becomes Sycamore’s biggest investment to date.

In what could be a win-win for both parties, Sycamore expands its retail reach even further and Belk gets owners with deep pockets who are committed to expanding the brand.

“They believe we can grow within our footprint and into contiguous markets,” CEO Tim Belk said of the deal with the family firm’s new owners.

“Sycamore really likes our position in the market – modern Southern style – and they feel we are differentiated from the competition.”

Belk, who will remain in his current position at the group, added: “We plan to grow Belk by executing our current strategic initiatives and undertaking new growth initiatives together with Sycamore.”

So what does this mean for the US department stores sector? Belk currently operates 297 stores in 16 Southern states and has a growing presence online. Its sales inched up 1.8% to $4.1bn last year, although investments in stores, e-commerce and infrastructure cut profits by 7.8% to $146m

It’s clearly a major player in its home markets but it’s those digital ambitions that are key. Belk said its top priority is to grow its omnichannel ops that so far account for around 9% of total business, or about $370m.

The company came relatively late to e-tail but has got the message about its importance and has seen fast growth through the online channel recently.

Continuing to focus on this area gives it instant presence in a much wider market before it even gets around to thinking about store openings and shows it’s determined to make an impact in the retail sector’s biggest growth channel.

Stefan Kaluzny, MD of Sycamore Partners, said of the deal: “We have great respect for Belk’s management team and associates, its deeply rooted brand, its footprint of stores and its growing online presence. Belk is exactly the kind of investment we look for: an outstanding brand with a proven success formula and the potential for further growth.”

Sycamore’s retail portfolio includes Aéropostale, Coldwater Creek, EMP Merchandising, Hot Topic plus Torrid, the Kasper Group, Kurt Geiger, MGF Sourcing, Nine West Holdings, Pathlight Capital and Talbots.

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