Belk reduces debt by nearly $1 billion; has new owners

Belk, Inc.’s balance sheet is looking a lot stronger.

The privately owned department store company, which operates nearly 300 stores across the Southeast, said it has completed a value-maximizing deleveraging transaction with its first and second lien lenders and equity sponsor, Sycamore Partners. Through the transaction, certain of Belk’s existing lenders, including funds associated with global investment firm KKR and Hein Park, will take controlling interest in the business from Sycamore, which acquired Belk in 2015 for $3 billion.

 Belk said it has reduced its outstanding debt by more than $950 million, amended its existing asset-based credit facility to extend the maturity date to July 2029 and secured approximately $485 million in new capital, including $275 million of secured term loans and a $210 million securitization facility secured by revenue streams from its loyalty credit card program.

“Today’s announcement marks a pivotal milestone for Belk as we move into the future with a capital structure that positions our business for sustainable, long-term growth and profitability,” said Belk CEO Don Hendricks. “We are confident that our stronger balance sheet will enable us to build on the momentum and growth we’ve seen in recent quarters, better serve our customers and their communities and be an even stronger partner to our vendors.”