Belk, Inc. (OTC:BLKIA) announced it is closing two department stores in 2018, including one in West Virginia and the other in Georgia. The Belk layoffs will result in the loss of 183 full- and part-time jobs.
While the department store says there are no plans to close additional locations, the company has been trimming its number of stores over the last few years and continues to show the strain many traditional brick-and-mortar retailers face in competing with online e-commerce juggernauts like Amazon.com, Inc. (NASDAQ:AMZN), , including Target Corporation (NYSE:TGT).
Belk to Close 2 Department Stores in 2018
Belk’s is shuttering two department stores in 2018. One is in Morgantown, West Virginia, and the other is in Atlanta, Georgia. The Charlotte-based retailer will be closing its store in Morgantown in March and the Belk in the Buckhead area of Atlanta will be permanently shuttered by the summer of 2018.
The closures will put a total of 183 people out of work: 39 full- and part-time positions in Morgantown and 114 full- and part-time positions in Atlanta.
Commenting on the store closures, Andy Izquierdo, a spokesperson for Belk, said that the company, “just made the strategic decision to close based on the best path forward for our business.”
Belk was founded in 1888 in Monroe, North Carolina. The Belk family sold the department store chain in 2015 to New York private equity firm Sycamore Partners for $3.0-billion. As it currently stands, the privately held Belk has 293 stores in 16 Southern states.
Belk’s Previously Announced Store Closure in 2018
Before he retired, Tim Belk, former CEO, said Belk will, “always prune the underperforming stores,” adding that there were no plans for mass store closures. Since the new owners took over in 2015, however, it’s been a different story. Belk as closed stores in Culpeper, Virginia; Eden, North Carolina; and Union, South Carolina.
In July, Belk said it will close its Brookwood Village location, just outside Birmingham, Alabama, in January 2018.
The closing of the Belk in the upscale Brookwood Village is a major blow to the mall. As a major anchor in the mall, Brookwood recently underwent a $20.0-million renovation. Macy’s Inc (NYSE:M) is the other major tenant. Time will tell if Brookwood Village can entice a new tenant to take over the 106,125-square-foot space being vacated by Belk.
Kmart and Target to Close Stores in 2018
In hindsight, Belk sold itself at the perfect time. Since 2015, department stores, and the retail sector in general, has been besieged by skyrocketing growth in e-commerce. Fewer shoppers are also darkening the brightly light halls of America’s once packed shopping centers.
Major retailers across the U.S. have been shuttering brick-and-mortar locations en masse. In the first half of 2017, more than 300 retailers have filed for bankruptcy; that’s a 31% increase over 2016.
Meanwhile, 2017 has set a record for the number of store closures. Since the start of 2017, U.S. retailers have closed 6,700 stores. Most notably, RadioShack Corp has shuttered 1,470 stores, followed by Payless Inc (700), Ru 21, Inc. (400), Ascena Retail Group Inc (NASDAQ:ASNA, 400), Sears Holdings Corp (NASDAQ:SHLD) and Kmart (358), J C Penney Company Inc (NYSE:JCP, 138), and Macy’s (100).
It appears as though the retail Armageddon is going to continue well into 2018. In addition to the three Belk closures, Sears said it will close 45 Kmart stores and 18 Sears locations in late January 2018. Target, meanwhile, has determined 12 more underperforming stores that it will shutter across the country in February 2018.
Lack of profitability is being cited as the main reason for the February closures. “This decision was not made lightly,” said Erin Conroy of Target. “We have a rigorous process in place to evaluate the performance of every store on an annual basis, closing or relocating underperforming locations as needed.”NYSE:M
The momentum that made 2017 a record year for store closures looks like it will hold in 2018. Along with Sears, Kmart, Target, and Belk, there is more than enough reasons to worry that additional retail chains will either shutter their doors or file for bankruptcy.
“Belk to shutter two stores in 2018,” Charlotte Business Journal, November 14, 2017.
“About Us,” Belk, Inc., last accessed November 15, 2017.
“Belk CEO Tim Belk to retire, ending 128 years with family member at the helm,” Charlotte Business Journal, June 29, 2016.
“Belk’s Brookwood Village location is set to close in 2018,” ABC 33/40, July 11, 2017.
“Brookwood Village,” Brookwood Village web site, last accessed November 15, 2017.
“Weekly Store Openings and Closures Tracker #32: Target to Close 12 Stores; Sears to Close 63 Stores,” Fung Global Retail & Technology, November 10, 2017.
“Another 60-plus Sears, Kmart stores set to close in January 2018; see the list,” USA Today, November 5, 2017.