Belk’s top lenders, including KKR, looking to avoid taking department store through chapter, WSJ says

Belk department store

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KKR, Blackstone and different main lenders to Belk are in talks with the North Carolina-based department store chain to preserve it out of chapter, in accordance to a Wall Street Journal report.

The firm, its lenders and the private-equity agency Sycamore Partners are inching nearer towards reaching an out-of-court deal, the report mentioned, citing folks accustomed to the discussions.

Representatives from Belk, KKR and Blackstone didn’t instantly reply to CNBC’s requests for remark. Sycamore declined to remark.

A deal isn’t assured at this level, the Journal report cautioned, however it mentioned Belk’s lenders have famous how the Chapter 11 chapter course of has proved troublesome for various different retail chains through the Covid pandemic, with some being compelled to liquidate.

KKR and Blackstone are hoping to convert a portion of Belk’s $2.6 billion debt into fairness, probably through an out-of-court deal that may enable Sycamore to retain an possession stake, the Journal mentioned. KKR is “reluctant” to take Belk through an in-court chapter course of due to the excessive charges related to submitting, the report mentioned.

America’s department store operators — including Belk and its practically 300 shops primarily within the Southeast — have struggled as customers are frequenting malls much less typically, and are shopping for much less attire through the pandemic.

Last 12 months, Neiman Marcus, J.C. Penney, Stage Stores and Lord & Taylor filed for chapter. The latter, the oldest department store chain within the nation, ended up liquidating and shutting all of its shops. Penney narrowly escaped that very same consequence after U.S. mall homeowners Simon Property Group and Brookfield Property Partners acquired it.

Sycamore just lately bought the Ann Taylor, Loft and Lane Bryant girls’s attire manufacturers out of chapter from Ascena Retail Group. The non-public fairness agency additionally owns Staples, which final week made an unsolicited takeover supply for Office Depot dad or mum ODP.

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