Belk’s lenders look to avoid taking retailer through bankruptcy

KKR, Blackstone and different main lenders to Belk are in talks with the North Carolina-based division retailer chain to maintain it out of chapter, in response to a Wall Avenue Journal report.

The corporate, its lenders and the private-equity agency Sycamore Companions are inching nearer towards reaching an out-of-court deal, the report stated, citing folks conversant in the discussions.

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

A deal just isn’t assured at this level, the Journal report cautioned, nevertheless it stated Belk’s lenders have famous how the Chapter 11 chapter course of has proved tough for a lot of different retail chains throughout the Covid pandemic, with some being compelled to liquidate.

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

America’s division retailer operators — together with 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 throughout the pandemic.

Final 12 months, Neiman Marcus, J.C. Penney, Stage Shops and Lord & Taylor filed for chapter. The latter, the oldest division retailer chain within the nation, ended up liquidating and shutting all of its shops. Penney narrowly escaped that very same consequence after U.S. mall house owners Simon Property Group and Brookfield Property Companions acquired it.

Sycamore lately bought the Ann Taylor, Loft and Lane Bryant ladies’s attire manufacturers out of chapter from Ascena Retail Group. The personal fairness agency additionally owns Staples, which final week made an unsolicited takeover provide for Workplace Depot mother or father ODP.

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