Belk department stores weighing sale

Charlotte-based Belk Inc., the largest family-owned and operated department store chain in the United States, is exploring the possibility of a sale.

Belk confirmed on Thursday the newsfirst reported by Reuters. The company said it is entering a five-year “strategic planning process within a rapidly changing industry.”

The sale could value the store chain at as much as $4 billion, including debt, people familiar with the matter told Reuters. Major department stores, such as Macy’s Inc. and Nordstrom Inc., as well as large private equity firms are expected to be contacted by Belk to solicit their interest in a deal, Reuters reported.

Belk has hired investment bank Goldman Sachs Group to help it evaluate strategic alternatives, Belk confirmed to the Charlotte Observer, where the company is based. The analysis should conclude in the next several months.

“We are performing due diligence to carefully explore all options for our future,” Belk’s spokeswoman Jessica Graham wrote in an emailed statement to the Observer.

Belk reported Friday that its fourth-quarter earnings rose thanks to strong holiday sales, but full-year profits dropped as the company spent more to renovate existing stores and to open new ones.

Belk operates about 300 stores in 16 Southern states, including three in Columbia. Although it closed a store at Dutch Square, it expanded its operation at Columbiana Centre and operates stores at The Village at Sandhills and the struggling Richland Mall in Forest Acres.

For the fourth quarter, ended Jan. 31, Belk’s profits totaled $104.4 million, an 8.4 percent rise over the prior year. Income was up, the company said, thanks in part to a 5.2 percent increase in holiday sales through Jan. 3, 2015.

Last year, Belk’s sales totaled $4.1 billion, an increase of 1.8 percent over the prior year. But company profits dipped. Belk said its earnings totaled $146 million for last fiscal year, a 7.8 percent drop from the year before. The company attributed the decline to Belk’s investments in e-commerce and remodeling stores.

This story was originally published April 2, 2015 at 3:24 PM with the headline "Belk department stores weighing sale."