US department store Belk Inc up for sale with $4 bn valuation

US department store chain Belk Inc is exploring a sale that could value the mid-range to upscale department store in the US at around $4 billion, including debt, Reuters yesterday reported, citing people familiar with the matter

Belk has hired investment bank Goldman Sachs Group Inc to help it evaluate strategic alternatives, including a potential sale, the report said.

Belk is projected to have annual earnings before interest, tax, depreciation and amortisation this year of around $400 million, the report added.

North Carolina-based Belk is the largest privately-owned department chain in the US with more than 300 fashion department stores in 16 Southern states and notched sales of $3.5 billion for the fiscal year ended 31 January 2015.

Belk was founded in 1888 by William Henry Belk with his first store called "New York Racket" in Monroe, North Carolina with $750 of his savings, a $500 loan, and $3,000 worth of goods taken on consignment.

The name New York Racket was changed to "Belk Brothers," after Belk convinced his brother, physician Dr. John Belk to join him as his partner

The department chain is now run by the third generation of Belk family under the leadership of Tim Belk.

Although the company is family-operated, its Class A and Class B common stock shares are publicly traded on the OTC Bulletin Board or OTCBB market. A recent SEC proxy filing revealed that over 90 per cent of the Class A stock is held by Belk family.

Belk competes with larger retailers like Dillard's, Macy's and Von Maur.