When Lisa Harper takes over from Tim Belk as the CEO of Belk on Tuesday, it will be the first time the retailer is run by someone outside the Belk family.
But retail experts differ on whether Harper’s background as the CEO of Hot Topic Inc., a specialty store known for selling alternative-culture clothes and accessories, aligns with running a regional Southern department store.
“The person they hired was shocking,” said Howard Davidowitz, the chairman of retail consulting and investment banking firm Davidowitz & Associates Inc. “I’ve never seen a department store hire someone from that tiny of a specialty store.”
Hot Topic became a private company in 2013, but its last annual report as a public company says it had $741.75 million in total sales, compared with the $4.04 billion in sales Belk reported in 2014.
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But Marshal Cohen, a chief industry analyst at the NPD Group, says Harper’s background running a specialty store could bring a fresh perspective to the 128-year-old Charlotte-based chain at a time when traditional department stores face increasing challenges from online retailers and niche stores.
“She brings a specialty touch to the department store world,” Cohen said. “Department stores really have to specialize and differentiate themselves.”
Based in Industry, Calif., Hot Topic is a teen retailer operating in malls and online, and is one of the few retailers catering to alternative teen culture by selling graphic T-shirts, baggy “goth” pants, and clothing and accessories from the “Twilight” book and movie series.
Harper, a Durham native and UNC Chapel Hill graduate, was previously the CEO of Gymboree Corp., a children’s clothing store, and became the CEO of Hot Topic in 2011, after serving on the Board of Directors since 2008. Belk has said she will continue to serve on the Hot Topic board.
Mark Cohen, director of retail studies and adjunct professor at the Columbia School of Business, questioned whether running Hot Topic was good preparation for taking the helm at Belk.
“Lisa Harper’s apparent experience has nothing to do with running a department store,” he said. “I mean I just don’t get it.”
Tim Belk told the Observer on Wednesday that Harper’s experience with merchandising would serve her well at the company his grandfather founded in 1888. “She comes from the merchandise, product and design world so she knows about building assortments for the customers,” he said.
He added that it was a “nice surprise” to hear that one of Harper’s first jobs was at Belk.
“She has watched Belk from a distance and has been a big fan of the way we’ve developed the brand and looks forward to building on it,” he said.
Harper, who Belk said was not available for an interview, helped return Hot Topic to profitability in 2013 after years of declining sales, in part, by focusing on cutting costs and increasing licensing agreements.
In 2012, Harper told investors that she wanted to return Hot Topic to its “edgy, dark and sexy core,” according to a Bloomberg story, a sharp contrast from Belk’s “Modern. Southern. Style.” brand.
Belk and Hot Topic are also managed by the same New York-based private equity company, Sycamore Partners, which purchased Belk last December for $3 billion.
Steven Cox, a marketing professor with Queens University of Charlotte says that Sycamore’s familiarity with Harper was part of the reason it decided to select her as CEO.
“I think they are thinking let’s shake it up and they are shaking it up with someone they know,” said Cox.
Spokespersons for both Belk and Sycamore Partners said they would stand by their initial press releases when asked to comment.
Harper arrives at Belk at a challenging time for department stores as traditional brick-and-mortar stores struggle to remain profitable amid online competition. In May, Macy’s reported its worst quarterly sales since the recession.
“The sector Belk is in is under tremendous pressure,” said Mark Cohen. “This is not an assignment for the faint of heart.”