Thread regarding Belk layoffs

Great points. But what next? (After KKR getting control, selling out or re-purposing a lot and keeping some stores in business.) Bringing it back on the market, looking for next takers?

To the poster wondering about the logic in this "negation" to keep Belk afloat.

It is NOT about keeping Belk afloat. It is about assuring that everyone with interests gets their piece of the financial pie.

If Belk declares bankruptcy, very possible, everyone gets far fewer pieces of the pie, and severely reduced sizes/portions of those slices. What emerges from bankruptcy is always an upside down pie with vultures constantly nipping away at the carcass.

So the game is how can debt holders (of the bonds) excise the most out of this pile of steaming *. You can exchange debt at one interest rate for another at a lower rate, assuring you still get your principle back with just less interest. Given the returns in markets these past years, as we have heard from many financial sources, the loan returns, no matter what, are a money losing proposition. And therein is the problem...this company, these bonds are not paying for themselves and that money could have been earning huge returns elsewhere.

Close and sell of any losing store sites. Do so quickly. This may help re-inflate the overall value of the company thus allowing the debt to seem more reasonable/valuable to bondholders. Smaller, easier to sell too.

Sell off as much real estate as possible to raise money to reduce the debt. Again a lower level of debt makes the remaining debt seem more manageable.

Vendors, such that still exist outside of the incestuous relationship Sycko has with its own apparel production firms, will not regain any trust in Belk and if you look closely you will discover more and more are completely shying away from doing any business with Belk. Rightfully so.

Facts of the matter are, that when it gets this bad, that the financiers have gone public with their role and relationship with Sycko to extract whatever is possible from Belk, then the handwriting is one the wall and it's basically three letter: RIP.

Now may I again, for all of you, mention that IF Belk WAS worth saving? Dont'cha think Sycko would be investing in it? Rather than spending $billions$ on other things, including loans to other retailers (at usurious rates) ; quarter century rust bucket ocean ships, and another office supply firm that does NOT want to be associated with SYCKO and which deal will not pass muster with anti-trust regulators?

No, it appears Sycko is looking for any way all the ways possible to divest themselves from Belk having already siphoned off $2b in cash and if you think I'm wrong, let's hear it, otherwise and as always, stay safe, be well and look for other opportunities or sit tight and ride this out to the bitter end.

it's disturbing that Belk did not release a memo to employees about this. we had to hear about it from a newspaper.

I don’t know anything about finance world, but I struggle to see a logic in exchanging debt (huge!) for equity if shares are so cheap. So if KKR and others partners in this deal want to keep the business alive they have to invest, restructure, re-establish vendors trust- with no guarantee of success because of everything we know about apparel based retail now. Smart people, explain?

https://www.wsj.com/articles/kkr-led-lenders-aiming-to-restructure-belk-without-bankruptcy-11611165451