Long before Belk was bought by a private equity firm, and long before it announced plans to file for bankruptcy, the company helped shape the city we know today.
Driving the news: Belk, once the largest family-run department store chain, will file for bankruptcy Wednesday in an attempt to slash its debt load. Belk doesn’t have any immediate plans to close any stores or lay off any workers as a result, the company said recently.
Why it matters: In Charlotte, this isn’t just another story of a retailer to wither during the pandemic. Belk, founded by William Belk in Monroe in 1888, has touched just about every part of Charlotte.
- The company put us on the map as a corporate headquarters city. Beyond that, the Belk family funded hospitals, helped create SouthPark, and donated land to build UNC Charlotte.
And the family helped create Charlotte’s most important economic engine: the airport.
Backstory: John Belk, William’s son, served as mayor from 1969-1977 and pushed for bond referendums to expand the airport. Ultimately voters approved the construction of a new terminal. That led Piedmont Airlines — a predecessor to U.S. Airways and now American — to choose Charlotte over Winston-Salem for its hub.
- “If you were going to bet on which city was going to emerge as the economic center of North Carolina, you would have bet on Winston-Salem,” Michael Marsicano, president and CEO of Foundation For The Carolinas, told me. “That airport decision changed everything.”
Today, Charlotte’s airport is the nation’s sixth busiest. Corporations and developers frequently cite the airport as one of the main draws of the region.
John Belk saw the “big picture a lot better than most people could,” Joe Epley, a retired Charlotte PR executive who ran John Belk’s first mayoral campaign, told me years ago.
Another notable instance of Belk seeing the picture came shortly before he became mayor. In the early 1960s, Belk partnered with George Ivey, head of the former Ivey’s department store, to buy 104 acres from former governor Cameron Morrison in south Charlotte, wrote Howard Covington, in his book “Belk: A Century of Retail Leadership.”
- The two businessmen co-developed the property. Belk and Ivey’s were anchors of the mall they later opened there — SouthPark.
- The reopening of the renovated SouthPark Belk in 1986 was a black-tie, red-carpet affair that designer Oscar de la Renta attended. The newly overhauled store, Covington wrote, established that Belk was “as sophisticated and contemporary as any retail outfit in the country.”
So what happened to Belk? And what happens next?
Belk sold itself to private equity firm Sycamore Partners in late 2015. Sycamore financed the deal with over $2 billion in debt, the Observer reported. Sycamore liked Belk’s Southern personality, but over the years Belk’s debt load hamstrung the company, limiting its ability to invest and stay competitive in the digital age, the Observer wrote.
- In 2016, Tim Belk stepped down as CEO, bringing to a close more than 125 years of family leadership at the company. (Through a spokesperson, Tim Belk declined to comment. Sycamore Partners also declined to comment).
Community involvement hasn’t been the same with Sycamore Partners. Belk ended its mobile mammography unit, which detected 50 instances of breast cancer during its five-year run, I once wrote.
- In 2019, Belk ended its sponsorship of the Belk Bowl college football games.
- Sycamore’s commitment “is to Sycamore,” says Mark Cohen, a director of retail studies and adjunct professor at the Columbia School of Business. Private equity shops carry with them no real sentimental connection to anything.”
Then the pandemic crippled Belk and just about every other department store. JCPenney filed for bankruptcy last year, as did Neiman Marcus.
- From late March to the end of 2020, Belk’s sales plummeted 32% year-over-year, per the Observer.
What’s next: Sycamore could eventually opt to lay off employees, Cohen says. Or they could sell off warehouse space and some of its real estate in order to trim expenses.
But Cohen added, “Who the hell is buying department store space these days?”
The big picture: Belk’s legacy here is safe. The family has injected hundreds of millions into the local economy through permanent endowments they set up, Marsicano said.
The late Sarah Belk Gambrell, daughter of the Belk company’s founder, started the Gambrell Foundation in 1988, for instance. Its goal is to invest in nonprofits that work on equity issues, including Time Out Youth and Planned Parenthood. A few years ago, the foundation partnered with The Foundation For The Carolinas to fund projects that foster economic opportunity.
- The Gambrell Foundation’s assets have grown to nearly $127 million, according to its most recent tax filing. Sarah Belk Gambrell passed away last summer; her daughter Sally heads the foundation today.
“That legacy of philanthropy that has been handed down from one generation to another in lump sum is one of the most important and most extraordinary stories of generosity … that we have in Charlotte,” Marsicano said.