It's been almost three years since the nation’s largest family-owned department store chain, a vital part of Charlotte's fabric for more than a century, said it was exploring the possibility of selling itself.
Belk’s December 2015 sale to private equity firm Sycamore Partners was the first leadership change into non-Belk family hands in the company’s nearly 130-year history.
Belk was the first department-store purchase for Sycamore Partners, a New York-based firm that’s notoriously tight-lipped about its investments, such as its $6.8 billion purchase of Staples last year.
The firm declined to comment for this story. Through a spokesman, Belk declined to make any executive, including CEO Lisa Harper, available for interviews.
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Shoppers may not notice much of a difference at their local store. But behind the scenes, Belk’s owners have been quietly making changes to get the most out of their $3 billion investment.
Those changes include store closures, job cuts, shifts in the company’s community involvement and changes to what the company sells in its stores.
Layoffs and consolidations
As a hometown brand, Belk has always been more than just a place where people shop for clothes. The Belk family name is splashed all over the Charlotte region, including on a freeway and buildings. Former Belk CEO John Belk serve four terms as Charlotte’s mayor.
Since Sycamore took over, the company has slashed jobs across stores in the retailer's 16-state footprint. Belk has also cuts hours of some store employees, while increasing hours for others.
And Belk laid off employees at its corporate offices off Tyvola Road. The company employs about 1,200 at its headquarters, down from more than 1,400 in spring 2016.
Belk isn't alone in cutting jobs and hours. Other department store chains including Sears, J.C. Penney and Macy's have all closed stores in the Charlotte area and beyond as customers are increasingly opting to shop online.
Belk also decided to close some under-performing stores. Two locations closing this year, for instance, include one in West Virginia and a large store in Atlanta’s prominent Buckhead neighborhood. Belk's current store count is 292.
But Belk's new leaders have long said the company remains committed to maintaining its "Modern. Southern. Style" identity.
Under Sycamore, Belk has made a number of changes at its headquarters as a nod to the company's history, including adding "The New York Racket Café," a nod to founder William Henry Belk’s first store in Monroe. Along with consolidating employees into one building, Belk has added a company history wall and a new fitness center with regular workout classes and personal trainers, spokesman Tyler Hampton said.
Sycamore remains quiet about what its plans are for Belk, and as a private firm, Sycamore also won't say how profitable it has made the company.
"Sycamore still seems committed to the retail sector with the purchase of Staples, but I have not seen any big announcements on Belk," Queens University of Charlotte professor Steven Cox said.
Harper, formerly the CEO of the retailer Hot Topic and the now-defunct kids' retailer Gymboree, took over as Belk's chief executive in July 2016, following the retirement of Tim Belk.
While Harper does not have any executive experience in the department-store industry, Sycamore’s familiarity with her was part of the reason it selected her as CEO, Cox has said.
Harper had ties to North Carolina before becoming Belk's CEO: She is a Durham native and UNC Chapel Hill graduate. One of her first jobs as a teenager was at Belk.
She further cemented her roots to the area by buying a $2.6 million lakefront home in Cornelius soon after becoming the company's CEO, property records show.
One of the biggest ways Belk has worked to boost revenue is by expanding its private label offerings, including the launch of three brands, Madison, Wonderly and Lightning Bug.
The chain also expanded its popular Crown & Ivy brand to include men's, kid's and home products, in addition to its women's clothing line. This fall, the company will launch its first private label beauty brand, Belk Beauty. That will bring its total of private label brands to 14.
Private label expansion is happening all over retail, not just in department stores, said Roger Beahm, executive director of the Center for Retail Innovation at Wake Forest University.
"Continuation of the growth in those (is) going to mean a reduction in inventory of national brands, and maybe dropping some national brands," Beahm said.
Over the last two years, Belk has spent $50 million to renovate and reopen a number of stores, Hampton said. Belk is also modernizing its check-out systems with new technology, and is upgrading its inventory management, he added.
Other technological upgrades include a buy online, pick up in store option, which Belk tested in 15 Charlotte-area stores last holiday season and will be rolling out to over 200 stores this year, Hampton said, as well as a ship-from-store test that’s running in about 60 stores.
As customers shift their shopping online, Belk has improved its website's navigation and upgraded its mobile app, Hampton added.
Under current leadership, Belk has changed up some of its popular community involvement initiatives, too.
Belk ended its mobile mammography unit last year, for instance. The five-year project detected 50 instances of breast cancer during its run.
"We’re very proud of all that we accomplished through our partnership with Charlotte Radiology. After five years, our contract ended in 2017, and as we shift the focus of our new community impact program, Belk: Project Hometown, we will invest all of our resources into supporting that initiative," Hampton said.
As part of Project Hometown, Belk is spending $15 million over five years to revitalize neighborhoods across its southeastern footprint. Belk kicked off the project in December with the announcement of a Habitat for Humanity building project in Jacksonville, Fla.
Belk's sponsorship with the popular college football Belk Bowl ends in 2019. Frank Key of the Charlotte Sports Foundation, which puts on the bowl, said the group's options include getting the deal renewed or pursuing another title sponsor.
Previously, the bowl had Meineke as its title sponsor for six years. Belk has not said whether it will continue its sponsorship of the bowl.
Looking ahead, expect more changes at Belk, including closing more stores, as is often the case with a private equity takeover.
In a March profile of Sycamore Partners, the Wall Street Journal reported that the firm often closes stores and lays off workers in an effort to cut costs, "while remaining workers are often left to pick up the slack."
"If you’re getting fewer people into your stores and more people are buying more online, it doesn’t make sense to have a heavy brick-and-mortar presence," Beahm said.
Down the line, Sycamore could look to sell Belk to new owners, or take it public.
"The ultimate goal is to maximize the return on investment. If Belk doesn’t ... help them achieve their long-term goals, they will not hesitate to turn that business," Beahm said. "Eventually we will see additional ownership change."