The first quarter was kind to the family-run Belk Inc., where better sales and a drive to operate more efficiently translated into a big bottom-line gain.
This story first appeared in the May 27, 2010 issue of WWD. Subscribe Today.
First-quarter net income shot up to $25.2 million from $500,000 a year earlier. Revenues for the three months ended May 1 rose 5.7 percent to $803.9 million from $760.9 million on a 6.4 percent rise in comparable-store sales.
The Charlotte, N.C.-based department store built the quarter’s gains on broad-based strength, singling out women’s suits, dresses, shoes, accessories, men’s fashions and infant and toddler goods as top sellers.
“Customers responded very favorably to our spring fashion assortments and enhanced marketing efforts,” said Tim Belk, chairman and chief executive officer.
“Increased sales, combined with continued outstanding results from our inventory and margin improvement initiatives, produced excellent profit growth for the period,” Belk said.
The department store, which is privately held and reports results because it has public debt, launched a self-tender offer in April to purchase up to 2.9 million shares of common stock for $26 apiece. As of May 19, nearly 2 million shares had been tendered, carrying a total price of $51.4 million.
The 306-door chain opened a new store in Port Orange, Fla., during the quarter. It also plans to complete major renovations this fall at stores in Hattiesburg, Miss.; Chattanooga, Tenn., and Tuscaloosa, Ala.
As a closely held company, Belk managed to enjoy some of the benefits of the recovering U.S. economy, including rebounding consumer confidence and spending, while avoiding the market turmoil caused by Europe’s financial troubles.
The firm has also survived the shakeout in the department store world that saw most of the traditional players get consolidated into Macy’s Inc. Belk has produced more than $268 million in profits over the past five years, losing ground only during the crash of 2008.