Belk CEO’s resignation offers retailer chance to ‘change its trajectory,’ experts say

Belk’s abrupt CEO change could provide a chance to hire someone outside the company and bring new ideas to the Charlotte-based department store, retail and marketing experts told The Charlotte Observer.

The iconic Southern chain has been in flux since emerging from bankruptcy last year, while navigating the pandemic and seeing a revolving cast of CEOs in the past year.

Effective Monday, Don Hendricks became interim chief executive officer following Nir Patel’s surprise departure that was announced late Friday. Patel lasted less than a year as CEO: He was promoted to CEO from president and chief merchandising officer of Belk last July.

February marked one year after Belk emerged from bankruptcy. But the 134-year-old department store still had not differentiated itself from the rest of the industry, said Queens University of Charlotte marketing professor Steven Cox.

Now, he said, Belk has the opportunity to hire a leader from outside the company with innovative ideas.

“If your ship is sinking, you don’t get the next officer in line to run it,” Cox told the Observer on Monday. “You’ve got to get a whole new perspective to change it. It’s absolutely an opportunity to change its trajectory.”

Leader with new ideas needed, expert say

In its announcement about Patel resigning, Belk only said that he was leaving the company “to pursue other interests.”

Retail experts offered their own theories as to why Patel may have left.

“Unlike its peers Dillard’s and Macy’s, Belk did not see a similar 2021 sales surge, I’m sure disappointing owners and investors as 2021 was a great year for most retailers,” Nick Egelanian, retail analyst and president of retail development firm Siteworks, based in Maryland, said Monday.

Belk did not respond Monday to requests for comment about the CEO change. Belk’s owner, the private equity firm Sycamore Partners, declined to comment.

Cox cited Kohl’s CEO Michelle Gass’ role in driving foot traffic to stores by partnering with other retailers like Amazon to make in-store returns, and with Sephora, which opened its first in-shop Charlotte-area store last month. Gass has been CEO since 2018.

“A leader can change the dynamic dramatically,” Cox said. “The advantage of brick and mortar is it can bring different venues together.”

Department stores, like the malls they anchor, need to find ways to find new ways to drive traffic, according to Cox. Perhaps stores could add a medical office where people can shop while they wait for an appointment. But the key is to test market new partnerships and ideas, he said.

Best Buy stores in the Charlotte market, for example, are testing store remodels and new shopping experiences.

“The marketplace is still there. You just have to know how to tap in a different way to differentiate yourself,” Cox said.

More on Belk leadership changes

Patel did not remain unemployed for long.

On Monday, retail video game store chain GameStop Corp. appointed Patel as its chief operating officer, effective May 31, according to a four-sentence company news release. Last year, GameStop made headlines when retail investors organized on social media to drive stock market prices up using the Robinhood Financial platform.

Patel was chosen as Belk CEO just months after the department store emerged from bankruptcy last year. He had been employed at at Belk in various roles for five years. Prior to working at Belk, Patel was senior vice president for Kohl’s.

He had replaced Lisa Harper, who had been CEO since July 2016 after leading Hot Topic. This month, Harper was named CEO of Torrid Holdings Inc., a women’s retail store.

Harper was Belk’s first CEO outside of the Belk family.

In 2015, the family sold the iconic department store chain for $3 billion to Sycamore Partners, based in New York.

Now, Belk has named an interim CEO. Hendricks joined Belk as chief operating officer in 2016 and was named president in 2020. He previously worked in roles such as chief information officer and chief operating officer at Gymboree, Hot Topic and Torrid.

Sycamore Partners owns Belk, Torrid and Hot Topic.

Changes at Belk and what’s next?

Belk has nearly 300 stores in 16 Southern states.

The company filed for Chapter 11 bankruptcy protection on Feb. 23, 2021, planning to restructure and eliminate $450 million of debt. Belk emerged from bankruptcy protection a day later.

Since then, Belk’s largest notable changes have been in leadership, including the CEO role. Belk also launched contactless services and new products during the pandemic.

In July, Belk subleased its Tyvola Road corporate office where about 1,200 employees worked. Belk has about 17,000 full- and part-time workers at its stores and distribution center.

While department stores like Macy’s are adding a distribution center in North Carolina to meet increased online sales and delivery, Belk closed one of its Carolina sites. The Jonesville, S.C., facility is closing, laying off 310 workers April 30 through May 28, the Observer previously reported.

Cox said distribution centers are crucial to quick, fast-growing online sales.

“You either need to renovate what you have on a fairly quick basis or you need to build new,” he said.

And an advantage stores like Belk have is that online order returns also can be made in stores. “Amazon can’t do that,” Cox said.

This story was originally published May 17, 2022 at 6:00 AM with the headline "Belk CEO’s resignation offers retailer chance to ‘change its trajectory,’ experts say."