Sycamore’s Belk Files Bankruptcy to Tame Debt, Raise Cash

(Bloomberg) -- Belk Inc., the chain owned by Sycamore Partners, filed for bankruptcy Tuesday in an effort to tame debt at the struggling retailer.

The southeastern retailer, which filed its Chapter 11 petition in Houston, enters bankruptcy after having said earlier this year that it put a restructuring plan in place that was pre-approved by a majority of its debt holders. It listed assets and liabilities of between $1 billion and $10 billion each in its petition.

Belk expected that plan would cut its debt by $450 million and provide $225 million of new capital from Sycamore and other lenders, according to a Jan. 26 company statement.

Bloomberg on Jan. 25 reported Belk was preparing a Chapter 11 bankruptcy filing to tame its debt.

Read more: Belk department store chain said to plan bankruptcy to tame debt

Department store chains have already been suffering from a years-long decline as shoppers shifted to more specialized or novel merchants. Last year, J.C. Penney Co. and Neiman Marcus Group Inc., filed for bankruptcy.

William Henry Belk opened his first store, called The New York Racket, in 1888. The mid-priced chain bought up other department store chains along the way growing to almost 300 locations in 16 states, mostly in the South. Sycamore, a private equity firm, bought Charlotte, North Carolina-based Belk in 2015.

The case is Belk Inc., 21-30630, U.S. Bankruptcy Court for the Southern District of Texas

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