There’s a change in command in motion at Belk Inc., though not necessarily a major shift in strategy at the Charlotte, N.C.-based department store chain.
“My feeling is that we are in the early innings of building out Belk’s positioning,” said Tim Belk, the retailer’s chief executive officer, who on Wednesday revealed he will be succeeded by Lisa Harper, who was ceo of Hot Topic. Harper takes over her new role on Tuesday.
Belk, the grandson of founder William Henry Belk and ceo of the chain since 2004, fostered a culture of innovation and calculated risk-taking. Not long after the 2008 Great Recession set in, he triggered a battery of strategies to re-brand and modernize the business and its image, and move past a reputation for being industry followers, not leaders. A four-year-old marketing mantra, “Modern. Southern. Style” continues to serve as the underlying guide for all of the company’s initiatives.
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Under Belk, the chain has been growing contiguously in its Southern geography, particularly in Texas. It’s also been pumping up flagship locations, and investing in its online business, which is the fastest growing area of Belk. “We continue to invest in digital and are re-platforming our website,” he said.
Belk has also supported new signature branding events like the Belk Bowl college football game that gives the chain national exposure, and the Southern Designer Showcase, a strategy featuring designers with ties to the South.
“The general direction will remain the same,” Belk told WWD, an hour after the news of his upcoming departure broke. “I am sure Lisa will add to it and will be building on the direction.”
He will remain on the board, but his departure as ceo marks the first time in the store’s 128-year history that it will no longer be run by a Belk family member. Last December, the $4.1 billion retailer was sold to Sycamore, a private equity company. Also last year, Tim’s brother John, who served as president and chief operating officer, left the business.
Hot Topic is part of Sycamore’s investment portfolio, which also includes Aeropostale, Coldwater Creek, Dollar Express, EMP Merchandising, the Kasper Group, MGF Sourcing, Nine West Holdings, Talbots and Torrid.
Stefan Kaluzny, chairman of Belk Inc. and managing director of Sycamore Partners, said, “Tim’s vision and passion as a leader were among the qualities that first attracted us to Belk, and I look forward to continuing to work with him on the board. We are excited for the company’s next chapter, and we believe Lisa will position Belk for future success.”
The 57-year-old Harper has a strong track record at specialty apparel chains, but has never held a key role at a department stores, suggesting a learning curve. She joins a small field of females commanding a major retail chain, including Karen Katz, ceo of Neiman Marcus Group, Bon-Ton ceo Kathryn Bufano (who used to be president of Belk) and Jane Elfers of The Children’s Place.
Belk supported Sycamore’s choice for the company’s next ceo, saying, “Lisa is very skilled at building brands and has a history of that. That’s a terrific thing she can bring to Belk and building out our ‘Modern. Southern. Style’ positioning. She also has a lot of background in product.”
He noted that Harper worked at Levi’s for seven years and launched the women’s Docker business.
“She’s a seasoned retail leader, very good in design and product. She had a terrific track record at Hot Topic. Before that she was ceo of Gymboree. She effected a turnaround there. She’s got a lot of talent in leading an developing people,” he said.
Belk also pointed out that Harper is very familiar with the department store chain as a native of Durham, N.C. She worked at one of its stores as a high school teenager, as a floater at the South Square Mall unit.
Harper became ceo of Hot Topic in March 2011 and continues to serve on that company’s board. Before that, she was ceo of the Gymboree Corp. from 2001 to 2006 and chairman from 2002 to 2006. She also held various creative, merchandising and design positions at Gymboree and earlier held similar positions with several other clothing retailers, including Limited Too, Esprit de Corp., GapKids, and Mervyn’s.
She was not available to comment Wednesday on her new job.
Asked if there was pressure from Sycamore to leave the company, the 61-year-old Belk replied, “This is a personal decision. Now is the right time to move on and retire. I am feeling really good about where we are in this transition and where Belk is in the retail marketplace. We have made a lot of progress, from old Belk to new Belk.”
Over the last several decades, many regional retailers have struggled for survival and either went out of business or were consolidated into larger retail operations. Belk, despite its concentration in the South, has been a steady operator, partly by taking over some regional competitors, such as Parisian; maintaining strong relationships with vendors, and developing strong shopper loyalty and community ties.
With the new ceo and with the difficult retail climate currently, it remains to be seen whether the chain will maintain the course charted by Tim Belk. Three years ago, he unveiled a master plan for the business, in tandem with the celebration of Belk’s 125th anniversary, setting a goal of $6 billion in annual sales within five years and earnings growth of 10 percent a year. To reach the goals, the company became capital-intensive, planning to invest $600 million over five years, from fiscal 2012 forward. Through the recession, the company, unlike other retailers, built a stronger balance sheet and liquidity, partly by cutting dividends and benefits but not staff or anything customer-facing. Expansion was halted but not renovations and remodels or the technology spend.
Generally, department and specialty stores have been showing weak performance since last year. But Belk said his business “is doing well, continues to perform, and had a good year last year.”
“I am making no plans at this point. I am deliberately deciding not to do anything. I will take six months and try to say, no no and n” to any opportunities that arise in the near future, he said.
“I want to be thoughtful about what’s next. I am excited about the options that will be there. I am convinced there could be a chapter two and a chapter three. I am not restricting myself to retail or other forms of business.” Non-profit is also a consideration, he added.
Belk did say he had “strong, mixed feelings” about leaving. “I have a lot of great relationships in place, and watching people grow and develop, walking away from all that will be really hard.”