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The untold truth of Belk

If you’ve ever gone shopping in the southern U.S. states, chances are you’ve been to Belk. The retailer started as a small business in the late 1800s and has grown into one of the most recognized department stores in the country with locations spread across 16 states (per Belk). If you’ve never shopped there, perhaps you’re at least familiar with the brand from the Belk Bowl (now known as the Duke’s Mayo Bowl) which was an annual match-up of two division champion college football teams. Or maybe you recall Belk’s sponsorship of season 12 of Project Runway, where the retailer contributed shoes and accessories to the fashion competition show. Host Tim Gunn summed up the department store’s reputation by saying, “Belk epitomizes the modern, Southern woman,” (via The News & Observer).

Fans of Belk love the shoes, cosmetics, home goods, and of course, the clothes that line the shelves. Belk is home to designer brands like Ralph Lauren, Coach, and Calvin Klein, as well as everyday apparel labels like Jessica Simpson and Lilly Pulitzer. Sex and the City star Kristin Davis even had a line featured at Belk for a short time. After so many years in the retail business, Belk surely has a story to tell. We did a deep-dive into the evolution of this southern gem and are here to share the untold truth of Belk.

Belk began as a small bargain store

Belk wasn’t always the massive department store we know it as today. According to the store’s website, William Henry Belk opened what would become the first Belk store in a 1500 square foot space with $750 of his own savings, a $500 loan, and $3,000 worth of merchandise “taken on consignment from a bankrupt store,” which means Belk was basically selling another retailer’s goods to earn a fraction of the profit. And while $1,250 sounds like small potatoes in modern time, it amounted to over $34,000 in investment in Belk’s day. Oh, and did we mention he was only 26 years old at the time? 

At that young age, not only was William Henry Belk savvy about cash, but he also had a clever marketing strategy. Belk called his first store “New York Racket” (shown above) because he thought that name would imply something big and interesting and he adopted the slogan “Cheap Goods Sell Themselves.” What’s interesting is that the store was located in Monroe, N.C., which is a suburb of Charlotte and nowhere near New York. Mr. Belk’s investment was a success though; in less than seven months, he had turned a $3,300 profit, which may not sound like a lot until you consider that at the time that was equivalent to $90,287.31 today. With that kind of capital in hand, Belk was ready to expand.

If your last name was Belk, you were going to work retail

William Belk stuck to some core strategies in his business: he bought bulk goods “for cash” and sold them “at a low mark-up” with no negotiating allowed. And he had a simple return policy permitting customers to return any item if they weren’t “completely satisfied.” This sounds like Business 101 to us today but in the 1800s, it was a novel approach. Belk found continued success through these tactics and, according to the store’s website, he brought his brother Dr. John M. Belk on board in 1891, making him a partner in the Monroe, N.C. store.

From there, the Belk brothers continued opening stores across the southern U.S., hiring “local men to open and manage new stores” in exchange for “a share of ownership.” By 1923, the brothers were pulling in $10 million per year with 20 stores. When William Henry Belk and Dr. John Belk passed away, the business passed to William’s sons, John and Thomas, and by 1955, under this new generation of family leadership, Belk begun transitioning “from downtown bargain stores” into “shopping centers and regional malls across the south.” In 1997, Thomas Belk’s sons Tim, Johnny, and McKay Belk came on board and oversaw a transformation that would distinguish Belk among the ranks of American department stores.

Belk became America's largest privately-owned department store company

How does one man’s idea for a tiny bargain store in a North Carolina suburb become the largest privately-owned department store company in America? Well, the Belk family did it by merging all 112 stores into one company (Belk, Inc.) and buying up a bunch of other department stores across the southern U.S. Remember retailers called Proffitt’s and McRae’s? We barely do either, but they were part of the more familiar Saks company (as in Saks Fifth Avenue), and Nashville Business Journal confirms Belk bought 47 of their locations in 2005 to the tune of $622 million.

The retail giant didn’t stop there, though. In 2006, Belk, Inc. snatched up 40 Parisian department stores (also part of Saks) across Alabama and the southeast U.S. for $285 million, according to Encyclopedia of Alabama. It seems all these new locations necessitated a new image, and in 2010 Belk adopted its current tagline, “Modern. Southern. Style.” Much chicer than “Cheap Goods Sell Themselves,” right?

There was one more change on the way, however, which resulted in a blow to Belk’s reputation.

Belk got a little sloppy

In 2015, the Belk family sold the company for $3 billion to a private equity firm in New York City called Sycamore Partners. Critics say this move led to some negative changes at the store level (via Retail Dive), which may have been due to the elimination of 58 full-time management positions, per The Charlotte Observer.

Retail analyst Sanford Stein spoke to Retail Dive in 2019 about the move to fire so many managers saying, “They’ve cut an expense and overhead but also what’s necessary to make these spaces human. What is left for too many is they’re over-merchandised, they’re crowded, they’re poorly displayed, you can’t find anybody to take your money and you certainly can’t find anybody to guide your choices. It’s just product on top of product and nobody’s folded in months.”

Belk isn’t faring well in consumer reviews either. The retailer has a one and a half star-rating on Consumer Affairs where several of the complaints involve botched online orders and poor customer service. “This company under its new ownership has gone down the tubes,” one reviewer commented, adding, “They are clueless.” Yikes.

Belk is still doing some things right

Despite some shake-ups from a change in ownership, Belk is still a $3.6 billion company (as of 2019) with over 300 stores across the southeastern United States (per Forbes). Curious how the company’s spending all that revenue? Well, in the spirit of southern hospitality, Belk gives back to its community. The retailer created Project Hometown in 2017, a charity initiative that works to improve the “health, security, and educational opportunities” in underserved southern communities — specifically in Charlotte, N.C. where their home offices are based (via Belk). The chain also promotes civic engagement by encouraging store associates to volunteer and participate in fundraising opportunities.

The coronavirus pandemic has had a negative impact on many iconic retailers and Belk is no exception – according to The Charlotte Observer, Belk laid off a number of employees and eliminated several corporate positions in 2020 as a result. But, the 132-year-old company still managed to donate $75,000 to non-profits in support of Black Philanthropy Month, and recently built a 30-foot long flower wall dedicated to healthcare workers in Charlotte (via Belk). As for what’s next for Belk, more change might be ahead. The Business Journals reported in July 2020 that Sycamore Partners (Belk’s owner) has offered to buy fellow department store JC Penney for $1.75 billion with plans to merge the two. Sounds like a shopaholic’s dream come true.

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  • Posted on October 5, 2020