Belk is reportedly nearing a deal to file for bankruptcy, with plans for Sycamore Partners to hand ownership of the retailer to its lenders, people familiar with the matter told Bloomberg. The deal would take Belk through a pre-arranged restructuring of its $2.6 billion debt.
The move would mark a reversal of Belk and Sycamore’s earlier plan, which would have helped the struggling department store avoid bankruptcy altogether. Under the previously reported plan, lenders including KKR and Blackstone were working on an out-of-court deal that would have allowed Sycamore to retain its ownership.
Belk, like other department store retailers, has been struggling under the lockdowns and reduced traffic patterns created by the pandemic. The company introduced same-day delivery in October 2020 to help it compete with online retailers, but the move may have ultimately been too little, too late.
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