Belk Inc. has launched a voluntary severance program in an effort to streamline its corporate office, WWD has learned.
“Anyone who wants to opt in can opt in,” a spokeswoman told WWD, confirming the report.
Senior officials were informed of the program Tuesday. There are more than 1,300 employees in Belk’s corporate office in Charlotte, N.C. Belk, which generates about $4 billion in annual volume, has 22,000 employees in total.
Belk’s actions mirror mounting efforts through the retail industry to pare back, amid declining mall traffic, weak apparel sales, rising Internet activity, an overabundance of stores in the U.S. and not enough demand for the goods. However, Belk’s reductions are not considered as severe as those streamlinings at Macy’s Inc. and Sears Holdings Corp., which are both closing significant numbers of stores and reducing headcounts, while American Apparel is in the process of closing all of its stores and The Limited has just shut all of its stores. J.C. Penney Co. Inc. is expected to announce a significant level of store closings soon.
Belk had no estimate on how many corporate employees would opt into the program. The spokeswoman said that although people would be deciding to leave, it doesn’t necessarily mean that their positions are being eliminated. She also said that Belk is investing in certain areas, including marketing and visual functions.
It’s expected that Belk triggers additional restructurings in the future, though no specific information was disclosed at this point. A voluntary severance program would be an initial step to help minimize forced departures.
In December 2015, Sycamore Partners bought Belk Inc. for $3 billion, putting the Southern regional department store chain in the hands of a private equity company after being family-controlled throughout its 128-year history.
Since the acquisition, Sycamore has installed new leadership, including naming Lisa Harper chief executive officer. She succeeded Tim Belk, who retired in July. Belk’s new team also includes Ron Garrow, chief human resources officer; Randy Whitaker, chief stores officer; Mark Mizicko, chief planning officer and executive vice presidents and general merchandise managers, Nir Patel, men’s, kids, home and e-commerce; Nadine Rauer, feminine apparel, and Jan Clevenger, shoes, cosmetics, intimate apparel, accessories and fine jewelry.
Sycamore Partners’ holdings include such specialty chains as Hot Topic Inc., Nine West Co. and The Talbots Inc., which tend to have thinner ranks compared to department stores.
“Historically, department stores have operated with larger corporate infrastructures than other retail formats like specialty retailers,” observed Kirk Palmer, of Kirk Palmer Associates, a New York-based executive search firm.
Palmer added that in most cases at Belk, it would likely be those with a couple of decades or more of experience who have amassed more money and are closer to retirement that would take advantage of the voluntary severance program. “For them it could look like a decent deal,” Palmer said. “People in their 30s are at a different life stage and are less inclined to risk having a long period of unemployment. Often, they can’t afford to walk out of a job, unlike more experienced workers.”