NEW YORK — Declining comparable-store sales led to lower profits for Belk Inc. in the first quarter.
For the three months ended May 3, the Charlotte, N.C.-based department store chain said net income fell 18.5 percent to $14.1 million versus $17.3 million a year ago, as sales slumped 5.3 percent to $502.7 million from $531.1 million last year.
Belk, the nation’s largest privately held department store company, said the shortfalls were the result of a 7.5 percent drop in same-store sales “that resulted from soft economic conditions and a weak sales environment for department stores during the period.”
The decline in same-store results was partially offset by $9.9 million in sales from new, expanded and remodeled stores, Belk said. The firm entered the Gulfport, Miss., market with a store during the first quarter and plans seven new market entries this fall.
While privately held, the firm discloses its operating results because it has publicly traded debt.
“In spite of the difficulties faced by retailers in the first quarter, we produced solid earnings by focusing on inventory control and expense management,” said chief executive officer John Belk in a statement.
Separately, Belk has asked the U.S. District Court in Greenbelt, Md., to transfer the age discrimination suit filed by David Hines, former president of Belk’s northern division, to the U.S. District Court for the western district of North Carolina and also denied the charges filed by Hines in his suit.
As reported, Hines filed suit in April charging Belk with unfairly discriminating against him based on his termination at the age of 53. The suit claims Belk’s reorganization last year “was aimed at ridding itself of management over the age of 50 in favor of younger management employees.” The plaintiff is seeking $4 million in damages, plus interest and expenses.
In the late Nineties, Belk consolidated from about 100 family-owned operations into 13 regional divisions and finally into four regional units. However, it undertook what it termed a “merchandising and marketing consolidation,” completed last August, which resulted in terminations that Belk hasn’t quantified publicly.
Belk declined comment on the Hines suit, noting it doesn’t discuss matters awaiting litigation.
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