Charlotte, NC-based Belk department store said Wednesday that Tim Belk, a member of the third generation of the founding Belk family, will retire as CEO next month after serving in that capacity since 2004. He will remain on the company's board after he steps down.
Lisa Harper, most recently CEO of Hot Topic, will replace him. Before Hot Topic she was CEO of children’s apparel retailer Gymboree and has worked in merchandising and creative positions at Limited Too, Esprit de Corp., GapKids, Mervyn's, and Levi Strauss.
Since its founding in 1888—at the beginning of department stores’ heyday—Belk has enjoyed great loyalty and a true Southern identity, perhaps among the most important assets of any retailer. But department stores including Belk are facing many troubles these days, pressures that led to the $3 billion deal with Sycamore.
Along with decreasing mall traffic and pressure from big box stores, Belk is also facing a new threat from e-commerce giant Amazon, which has made an aggressive foray into apparel. Investment firm Cowen & Co. predicted in May that Amazon would replace Macy’s as the number one U.S. apparel retailer by next year, and some experts have said that Belk's move online has been relatively slow compared to its competitors. The retailer only sold gift cards and a small selection of home goods on its e-commerce site until late 2008, according to the Charlotte Observer, although it has recently ramped up its online efforts.
E-commerce and changing consumer habits have affected many department store retailers beyond Belk. For example, Macy's, the nation’s most visible department store, saw its sales decrease 7.4% to $5.77 billion in the most recent quarter. Its dismal report was mirrored by many of Macy’s competitors, with J.C. Penney and Sears also seeing sales declines in the most recent quarter.
SiteWorks president Nick Egelanian has gone so far as to note that modern retail is in the “post-department store era.”
“While department stores have been on the decline for more than two decades now, we expect to see dramatic acceleration of market share declines in 2016,” he told Retail Dive earlier this year. “On the flipside, new discount apparel concepts like Primark will continue to emerge, while established retailers like T.J. Maxx, Marshall's, Ross Dress for Less and Nordstrom Rack will add another 250+ stores in 2016.”
Although Sycamore has a portfolio of retailers, Belk was its first department store acquisition. Until Sycamore came along, Belk was the largest family-owned and operated department store in the country, with 293 stores in 16 Southern states plus its e-commerce site. The retailer has been closing underperforming stores, a strategy that the company says will not change with the new leadership.
While Harper might seem like a strange choice for Belk's new CEO, given her lack of department store experience, her vast resume at other retailers might help Belk adapt to the trends impacting department store retailers. Once more, she is no doubt accustomed to working with Sycamore—the private equity firm bought Hot Topic in 2013.