Belk, Inc. History
Charlotte, North Carolina 28217-4500
Telephone: (704) 357-1000
Toll Free: (866) 235-5443
Fax: (704) 357-1876
Incorporated: 1891 as Belk Brothers Company
Sales: $2.45 billion (2005)
NAIC: 452110 Department Stores
The mission of Belk is to be the leader in their markets in selling merchandise that meets customers' needs for fashion, quality, value and selection; to offer superior customer service; and to make a reasonable profit. Reflecting the beliefs of its founders of the various Belk corporations, Belk stores want their customers to have a feeling of confidence that they will receive honest and fair treatment, that they will get full value for every dollar, and that they will be satisfied in every respect so that they will want to shop with Belk stores again. Belk stores have a responsibility to the people who make their growth and success possible. They are committed to maintaining relationships of integrity, honesty, and fairness with customers, associates, vendors, other business partners, stockholders, and with all people in every community they serve. Vision: The vision of Belk is to be dominant in selling fashion merchandise that meets customers' needs for value, quality and service.
- William Henry Belk opens a discount store in Monroe, North Carolina.
- Belk Brothers Company is formed, and John Belk becomes a partner.
- The chain's sales approach $1 million.
- Leggett brothers begin opening stores in partnership with the Belks.
- Belk Buying Service is established.
- The first shopping center store is opened in Florida.
- Belk Stores Services, Inc. is formed.
- Rival Efird department stores is acquired.
- Belk hosts its first New York fashion buying show as its emphasis shifts to style.
- A huge office complex is opened in Charlotte, North Carolina.
- Belk Corporation acquires a controlling interest in affiliate Leggett Stores Inc.
- Belk, Inc. is formed from 112 existing Belk companies.
- Belk.com is launched.
- John M. Belk retires after 50 years as CEO.
Belk, Inc., is the largest privately held department store chain in the United States. The company is headquartered in Charlotte in the middle of its traditional stronghold of North and South Carolina. While it has flagship stores at large malls, the company has opened many stores in smaller cities. In all, there are 225 Belk stores in 14 states.
Belk, Inc. was formed in 1998 from a network of more than 100 separate businesses that had been built up over the previous century. Still operated by descendants of the founding Belk brothers, Belk is one of the few large family-owned retail entities remaining in the United States. Though privately held, Belk, Inc. has filed earnings statements with the Securities and Exchange Commission since its 1998 restructuring because it has some public debt.
Late 19th-Century Origins
In 1888, William Henry Belk opened a small bargain store in Monroe, North Carolina. The store, New York Racket, was financed with a loan from a local widow, Belk's savings, and goods on consignment. The goods' prices were clearly marked and not negotiated with customers, an idea that was just becoming accepted in retailing. Within seven months, Belk had gone from being over $4,000 in debt to earning a $3,300 profit.
In 1891, the founder approached his brother, John Belk, to become a partner in the prospering store. Thus the Belk Brothers Company was formed. A second store was opened in 1893 in Chester, South Carolina. A third opened in Union, South Carolina, in 1894, and the following year William Belk moved to Charlotte, North Carolina, to open the company's fourth store. His brother John remained to manage the Monroe store until his death in 1928. The brothers' stores were doing so well by 1895 that other merchants even began to copy its straight-talking slogans like "Cheap Goods Sell Themselves" and "The Cheapest Store on Earth."
William Belk's success resulted from some retailing ideas that were innovative for the time. In 1897, he combined the purchasing power of the four stores, plus two others in which the brothers had no financial interest, and formed a loose cooperative buying network. This allowed them to purchase goods in bulk quantity at favorable prices. All purchases and sales were cash. Belk also made extensive use of advertising. In 1899, the brothers opened a store in Greensboro, North Carolina.
Rapid Expansion Begins in the Early 20th Century
In the early 1900s, Charlotte was a boom town, expanding along with the textile industry, and was the state's largest city by 1910. That year, Belk sales approached $1 million, and a new five-story building was erected to house the Charlotte store. The company's greatest expansion followed World War I, as the southern economy received a boost. Cotton prices went up, and soldiers came home. Between 1918 and 1920, Belk stores' total sales more than doubled to $12 million a year. In 1920, Will Leggett, John Belk's nephew by marriage, opened a store with the Belks in Burlington, North Carolina. His brother, Fred Leggett, opened a store in Danville, Virginia, that same year, the Belk-Leggett. The Belk brothers often added managers' names to their own on new stores.
Boom days and postwar prosperity gave way to recession, however, and the Belks retrenched, not opening any stores between 1922 and 1925. In 1925, however, they opened three more stores and three again in 1926. In 1927, the Belks and the Leggett brothers agreed that the Leggetts would own 80 percent of the stores they opened, with Belk Brothers Company owning the remaining 20 percent. In the past, the Belks had always owned the majority of their stores. This arrangement formed the foundation of Belk's unusual organizational scheme.
Opportunistic Growth During the Great Depression
The years between 1910 and 1930 were prosperous for retailing. Competition, however, began to creep up on the Belks. Then the stock market crash of 1929 slowed Belk's sales growth, but its stores stayed open. Belk took advantage of other companies' misfortune by acquiring defunct stores, netting 22 stores in 1930 and 1931. In 1934, Belk opened a record 27 stores, expanding geographically into Tennessee and Georgia in the process. Charlotte was once again becoming a booming center of commerce in the South, and Belk expanded its headquarters store in that city. This location evolved into the organization's operational headquarters, consolidating purchasing, assisting with taxes and merchandise distribution, and providing other services for all affiliated stores. By 1938, Belk was doing business in 162 locations in seven states.
In response to growing competition from such national chains as JC Penney, Montgomery Ward, and Sears and Roebuck, which were thriving in larger cities, Belk stores were remodeled and expanded. Belk Stores Association had formed in the 1920s, gathering the new store managers for quarterly meetings. By the late 1930s, the group was too large to gather for meetings four times a year, so it met at annual conventions. Belk Buying Service was formally set up in 1940. World War II defense spending enhanced the economy, and, by the war's end, sales were two-and-one-half times what they had been in 1941. This helped pay off Depression debts and feed expansion. The Belks opened 25 stores in 1945 alone and achieved a net increase of more than 60 stores between the end of World War II and the close of the decade. In 1952, founder William Belk died at the age of 89. He had worked as the head of the company up until the time of his death.
Second Generation of Managers in the Postwar Era
After William Belk's death, his son Henry took his place. The founder's other sons, John and Tom, were also active in the company. Six months after his father's death, Henry opened the company's first shopping center store in Florida. This store marked a dramatic break from Belk traditions: a New York design firm created a fancy interior, music was played, and merchandise was displayed for self-service. This contrasted sharply with the Belk stores' trademark features of spare, no-nonsense decor and an army of well-trained sales clerks. Henry opened several more stores afterward without consulting his family, and by 1955 legal disputes were brewing among family members and other shareholders. Although lawsuits were filed, they eventually were dropped. Later that year, Belk Stores Services, Inc., was established to make a formal organization out of what had long been an operating entity. The BSS board then elected John Belk as president, leaving Henry to his Florida venture, the Belk-Lindsey Company. Though BSS cut all ties with Henry's chain of department stores in November 1955, family feuding would continue throughout the next four decades. John would later advance to chairman of BSS, with Tom as president.
The Belks' private-label business was now thriving, and by 1959 it accounted for a major share of the buying office's inventory. In the late 1950s, the Belks department stores had nearly peaked in the South, with 325 stores in 16 states. In 1956, Belk acquired its only viable competitor in the region, the Efird department stores.
Modernization Program Begins in the 1960s
During the 1960s, the company had to adjust to a changing retail environment in the South. Stores that could once count on their reputations as local institutions found themselves in the midst of a highly mobile population that was attracted to the offerings of big-city stores. The largely autonomous and divergent stores making up the Belk group were not prepared to compete. A more mobile society, newly popular shopping centers, and the South's expanding economy presented BSS with the task of uniting its network of stores.
In 1958, there were 380 stores in 17 states. By 1963, the stores were, for the first time, presented to the public as a unit instead of a string of independent operations. Change was still slow, however. At a time when more buyers were using credit, 87 percent of Belk's sales were still cash. In 1967, extensive meetings were held by BSS and its long-range planning committees to chart the company's future.
Meanwhile, more stores were added to the fold: 14 opened in 1969 and 16 in 1970. The new stores were larger and used modern management techniques, such as computerized payrolls and centralized personnel departments. As planning and coordination gained in importance, so did BSS's role. By assuming more leadership, it accelerated the changes as the stores moved from budget to fashion merchandise. Expansion continued, and between 1972 and 1975 more than 50 stores were opened. Several of the company's signature downtown stores were closed in favor of stores in the prospering outlying malls. Credit and data processing systems were centralized and upgraded. Another change was Belk's pursuit of upscale brand names. Estée Lauder, a brand of cosmetics, was aggressively wooed until it was added to product lines in 1975. Even Belk stores in smaller towns upgraded their look and merchandise. This served to add new customers to an already loyal clientele.
Under the direction of president and CEO Thomas Belk, the company succeeded in transforming its operations in order to meet the demands of style-conscious shoppers during the 1980s, as opposed to catering strictly to a clientele looking for thrift, durability, and value. For example, Belk hosted its first fashion buying show in New York in 1983, and within four years representatives from the nation's top fashion lines were competing for representation in the show. This further consolidated buying and proved Belk's place in the fashion retail market. Marking the change from bargain chain to fashion stores was top designer Oscar de la Renta's appearance at a grand reopening of a Belk store in 1986. Though some stores retained the small-town, bargain-budget flavor of Belk's founder's vision, others moved to suburban malls and shopping centers. The company celebrated its 100th birthday in 1988 while opening a huge new BSS office complex in Charlotte. The company would later close its New York office and consolidate buying operations at the new facility.
Transitions in the 1990s
Though the retail industry in general and the department store segment in particular were disrupted by recession, competition from mega-discounters, mergers, and multi-billion-dollar bankruptcies in the early 1990s, one observer characterized Belk Stores as "a rock of stability." The company achieved this constancy through a series of well-considered divestments and acquisitions. In an effort to focus on its strongest markets, the company sold a few stores in marginal markets, maintaining its strongholds in North and South Carolina. Hot on the heels of rumors that longtime affiliate Leggett Stores Inc. was negotiating a merger with Dillard Department Stores Inc., Belk's parent company purchased a controlling interest in the Virginia-based chain in the fall of 1996. The addition of Leggett's more than 40 stores increased Belk Corporation's amalgamation of stores by nearly 20 percent and, perhaps more importantly, ensured the continuation of Leggett's long-running affiliation with Belk Stores Services.
Belk Stores withstood an unplanned management transition in January 1997 when 71-year-old Thomas Belk died following gall bladder surgery. His three sons, Thomas M. "Tim" Belk, Jr., H.W. McKay Belk, and John R. Belk shared the title of president and divided merchandising and operating responsibilities among themselves. Strategies for the future included cost reduction, consolidation of operations with a special focus on inventory management, and a continuing emphasis on the customer.
Belk, Inc. Formed in 1998
The Belk Companies posted earnings of $64.5 million on sales of $1.8 billion in the fiscal year ending February 1, 1997. Taken as a whole, Belk was the country's largest privately held department store chain, with 29,000 employees at 225 stores in 13 states. Half of the stores were located in North and South Carolina. The company closed more than three dozen stores, including a series of discount outlets known as Tags.
The 112 companies that made up the Belk stores were consolidated into one corporation, Belk, Inc., on May 2, 1998. According to an official history, Belk, Inc.: The Company and the Family That Built It, the initial filing with the Securities and Exchange Commission (SEC) had 7,358 pages and was more than three feet in height. However, the consolidation spared the owners from having to file more than 100 separate tax returns every year. While Belk remained privately held, it began filing returns with the SEC in 1998 due to the fact that it carried public debt.
A number of new projects refined the business in the late 1990s. The Belk National Bank was launched in Lawrenceville, Georgia, in 1998 to boost the company's credit card business. Belk tried installing in-store kiosks for online sales in 1999 but failed to generate much interest beyond the wedding registry. Two years later, Belk began selling merchandise over the Internet through its Web site, Belk.com.
The company also experimented with the size of its stores. A 2,000-square-foot "Belk Express" store stocked with lipstick and pantyhose was a success among professional women in downtown Charlotte. A series of 50,000-square-foot "smart stores" proved a manageable size for small towns. Belk was stepping up its marketing to younger customers through new private labels such as J. Khaki and Z Universe.
Expanding in 2000 and Beyond
In 2000, Belk opened a new distribution center in Blythewood, South Carolina. This facility replaced a half-dozen smaller warehouses. Sales were more than $2 billion and growing, though margins suffered in the weakening economy. The company fared relatively well in the very difficult shopping season following the 9/11 terrorist attacks on the United States.
Belk was expanding, adding plenty of retail space on the home front and in new territories. In 2002, the company added 40,000 square feet to its store at Charlotte's SouthPark Mall and opened a 180,000-square-foot location near Durham's Research Triangle Park. (Another 180,000-square-foot store had opened in Charleston two years earlier.) Belk consolidated its merchandising, formerly handled by the four divisions, into one central buying office during the year.
Texas was another focus of expansion beginning in 2001. Here as elsewhere, Belk preferred to open stores in smaller cities such as McKinney, Kerrville, and Waco. The chain's history in the state dated back to the 1950s when a store was opened in Paris, Texas. It ventured into Mississippi in 2003.
John M. Belk, son of the company's founder, retired in May 2004. He was succeeded as chairman and CEO by Thomas M. "Tim" Belk, Jr., who had previously been Belk, Inc.'s president of store divisions, human resources, real estate, and visual presentation. Tim Belk's brothers H.W. McKay and John R. Belk were appointed chief merchandising officer and chief operating officer, respectively, and remained co-presidents with Tim Belk.
John Belk left a company in good shape. Profits were up almost a third in the January 2004 fiscal year, to $111.5 million, as sales approached $2.3 billion. Sales were nearly $2.5 billion in fiscal 2005 as income climbed 11 percent to $124.1 million.
Principal Subsidiaries: Belk Administration Company; The Belk Center, Inc.; Belk Gift Card Company LLC; Belk International, Inc.; Belk National Bank; Belk-Simpson Company; Belk Stores Services, Inc.; Belk Texas Holdings LLC; Belk Texas LP; United Electronic Services, Inc.
Principal Divisions: Central; Northern; Southern; Western.
Principal Competitors: Dillard's Inc.; JC Penney Co.; Federated Department Stores; May Department Stores Co.; Saks Inc.
- "Battling Belks: Maul in the Family," Business North Carolina, December 1993, pp. 14-15.
- "Belk Corp. Buying Majority Stake in Leggett Chain," Daily News Record, September 16, 1996, p. 13.
- Blueweiss, Herbert, "Belk's ... Beginning the Next 100 Years," Daily News Record, January 16, 1989, p. 48.
- Blythe, LeGette, William Henry Belk, Merchant of the South, Chapel Hill: University of North Carolina Press, 1950; enlarged edition, 1958.
- Covington, Howard, Belk: A Century of Retail Leadership, Chapel Hill: University of North Carolina Press, 1988.
- Covington, Howard E., Jr., Belk, Inc.: The Company and the Family That Built It, Charlotte: Belk, Inc., 2002.
- Dyer, Leigh, "Head of Charlotte, N.C.-Based, Family-Owned Retail Powerhouse to Retire," Charlotte Observer, March 12, 2004.
- Halkias, Maria, "Department Store Chain Belk to Expand Texas Presence," Dallas Morning News, October 13, 2003.
- Jean, Sheryl, "Belk Department Stores Returns to Columbia, S.C.," State (Columbia, South Carolina), July 15, 1998.
- "John M. Belk Announces Retirement as Chairman and Chief Executive Officer of Belk, Inc.; Thomas M. Belk Jr., H.W. McKay Belk and John R. Belk Elected to New Corporate Positions," PR Newswire, March 11, 2004.
- Karr, Arnold J., "Markdowns Hurt Belk in Year," DNR, May 7, 2001, p. 1.
- Lee, Georgia, "Tom Belk: After Drought, Women's Seeing Revival," WWD, September 13, 1995, p. 18.
- Lee, Georgia, and David Moin, "Thomas M. Belk, 71, Belk Stores President, Dies in Charlotte," WWD, January 28, 1997, pp. 1-2.
- Palmieri, Jean E., "Many Department Stores Still Clicking; Belk," Daily News Record, January 17, 1990, p. 10.
- Postman, Lore, "Belk Stores' Revenue, Profits Lag Competitors' Results," Charlotte Observer, January 4, 1998.
- "Three Belk Brothers Promoted," Daily News Record, March 3, 1997, p. 2.
- Ward, Leah Beth, "Belk Department Store Chain Shareholders Approve Reorganization," Charlotte Observer, April 18, 1998.
Source: International Directory of Company Histories, Vol.72. St. James Press, 2005.comments powered by Disqus