Belk said it would enter into a restructuring support deal with Sycamore Partners, its majority owner, in addition to those who have over three-quarters of its first-lien term debt and all of its second-lien term loan debt.
“We’re confident that this agreement puts us on the right long-term path toward significantly reducing our debt and providing us with greater financial flexibility to meet our obligations and to continue investing in our business, including further enhancements and additions to Belk’s omnichannel capabilities,” Belk CEO Lisa Harper said in a statement.
The retailer indicated that the goal is to recapitalize the company, lengthen the maturities on each of its term loans to July 2025 and cut its debt load by approximately $450 million. As part of the deal, Sycamore will keep majority control of the retailer.
Furthermore, Belk indicated that it has attained financing commitments from Blackstone, KKR and Sycamore for $225 million in new capital, in addition to some of its current first-lien term lenders. Belk also said it intends to maintain payments to its suppliers, while all typical business operations will be ongoing amid the restructuring.
In separate news, L’Occitane’s U.S. division filed for Chapter 11 bankruptcy in New Jersey. The firm said the move is part of its plan to effect a “store footprint optimization plan, including the contemplated exit of unprofitable locations.”
Earlier in the month, women’s apparel retailer Christopher & Banks Corporation announced that it had voluntarily sought Chapter 11 bankruptcy. President and CEO Keri Jones said in a statement at the time that the firm had taken formidable measures to protect its business as it continued serving its customers “in a healthy and safe environment” amid the pandemic.