Belk announced that its nearly $40 million investment in store remodels, capital improvements and new store openings starting this year will include the opening of three new stores through the end of 2018, according to a company press release. Improvements include "buy online, pick up in store" services, phone charging stations and a service desk at the store entrance for gift wrapping, returns and Belk Rewards Card payments.
The first two stores will open Oct. 11 in Evans, GA and in Bowling Green, KY. The third is scheduled to open next year in Hagerstown, MD.
The company will also remodel 12 existing stores across its 16-state footprint, with an investment of nearly $10 million. Another $15 million in funding will go to capital improvements like parking lots, paint and roofing.
Belk may seem like a low-key, regional retailer, but the idea of a department store expanding its brick-and-mortar footprint these days is downright astounding.
Macy’s is in the midst of a 100-store-closure plan that some think could be just a start, while Nordstrom is looking to go private to regroup. Upscale department store Neiman Marcus, meanwhile, appears to be faltering under a massive debt load and plummeting sales.
The department store model itself is under siege: In January Moody's Investors Service warned that department stores would be unlikely to benefit from what should be a relatively healthy 2017, and several back-to-school retail studies (on the second most important selling season) found declining sales at department stores. Department stores are facing stiff competition from off-price retailers for apparel and home goods, beauty disruptors like Ulta and Sephora and even online mattress companies.
But all is not lost, says Howard Davidowitz, chairman of New York City-based retail consulting and investment banking firm Davidowitz & Associates. "I have never said the department store business is over — anyone who says that must be nuts," he told Retail Dive. "I’ve never said the apparel specialty business is over — that’s irrational. But I do think they’re going to face tremendous headwinds and tremendous changes, and we’ll see who the survivors are. We’re only in the second inning in this change cycle — so there’s going to be a lot of things happening, and a lot more scary stuff."
Davidowitz has hailed Nordstrom's reported plans to go private in order to make changes out of the glare of Wall Street, and noted that Belk, which like Nordstrom was until recently a retailer still greatly controlled by the founding family, did the same — the department store was acquired by Sycamore two years ago for $3 billion. "The smartest one is Belk, which sold out to private equity 10 minutes before department stores went into the crapper," Davidowitz said.