Belk Lenders Are Looking To Avoid Taking A Retailer Through Bankruptcy: WSJ

KKR, Blackstone, and Other Major Lenders Belk In talks with a North Carolina-based department store chain to keep it out of bankruptcy, According to a Wall Street Journal report.

The report, citing people familiar with the discussions, said the company, its lenders and private equity firm Sycamore Partners were close to reaching an out-of-court deal.

Representatives of Belk, KKR, and Blackstone did not immediately respond to CNBC’s requests for comment. Sycamore declined to comment.

The magazine’s report warned that the deal was not secured at this point, but said Belk’s lenders had noted how the Chapter 11 bankruptcy process proved difficult for a number of other retail chains during Coronavirus disease pandemic, With some being forced to liquidate.

The newspaper said KKR and Blackstone hope to convert a portion of Belk’s $ 2.6 billion debt into equity, possibly through an out-of-court deal that would allow Sycamore to hold an equity stake. The report said KKR was „reluctant” to take Belk through a bankruptcy process in court due to the high fees associated with filing.

America’s supermarket operators – including Belk and the nearly 300 stores mainly in the southeast – have struggled because consumers frequent malls more often, buying less clothes during the pandemic.

last year, Neiman Marcus, JC PenneyStages and Lord & Taylor filed for bankruptcy. The latter, the oldest chain of stores in the country, ended up liquidating and closing all of its stores. Penny narrowly escaped the same outcome after US mall owners Simon Real Estate Group And Brookfield Property Partners acquired it.

Sycamore recently bought women’s clothing brands Ann Taylor, Loft and Lane Bryant after bankruptcy from Ascena Retail Group. The private equity firm also owns Staples, which was last week Submit an unsolicited takeover bid for ODP parent for Office Depot.