How Belk Wooed Birmingham
In its 125-year-history, one of the retail giant’s biggest challenges was its entry, six years ago, into Alabama’s biggest market.
“It is a very special privilege for Belk to be a part of Southern communities for 125 years, and we don’t take that lightly,” says Johnny Belk, president and chief operating officer of Belk Inc.
In 1888, William Henry Belk opened his first store in Monroe, N.C., with $750 in savings, a $500 loan, and $3,000 worth of goods taken on consignment. His focus on customer service and offering good prices made his store an instant hit, and it eventually evolved into Belk Inc., the nation’s largest family-owned-and-operated department store company, with revenues of $3.78 billion in 2012, from 301 stores across 16 Southern states, including 22 stores in Alabama.
But Belk’s entrance into Alabama’s biggest city was a challenge. Although Belk had operated smaller stores in more rural areas of Alabama, it had no presence in the state’s major cities until it acquired Parisian in 2006. Founded in Birmingham in 1877, Parisian was beloved in Alabama and a sought-after tenant for upscale retail centers like The Summit in Birmingham and major malls in Huntsville, Montgomery and Tuscaloosa.
When Saks Inc., then-owner of Parisian stores, announced its plan to sell the stores to Belk, many in Alabama were unsure what to expect. Unable to get information about the type of store that would be taking over its anchor space at The Summit, property owner Bayer Properties filed a lawsuit in 2007.
“The covenants associated with the lease at The Summit required the tenant to maintain operations at a certain level, operating as a first-class, fashion department store,” says Jeffrey Bayer, founder and principal of Bayer Properties. “When the acquisition was announced, Belk did not operate what is known as a fashion department store in Alabama, and we couldn’t get anybody at Saks or Belk to answer our questions about their intentions. We felt like we had to protect our asset, so we filed the lawsuit to challenge whether they would adhere to the requirements of the lease.”
In response, Belk executives quickly arrived in Birmingham and met with Bayer. Tim Belk assured Bayer that his company intended to create a first-class fashion department store similar to its flagship store in Charlotte’s SouthPark Mall. “Once they really sat down with us and understood our concerns, they started making commitments about how they would inventory the store to attract the type of shoppers the Summit was meant to attract,” Bayer says.
Not only did Bayer drop the lawsuit, but “we patched up our relationship very early on,” he says. “And we have been more than pleased with Belk. The company is a very honorable, progressive retailer who is all about quality, and they have my highest respect.”
By late 2008, Belk had completed a $13 million renovation to its Summit store, including 50,000 additional square feet, new lighting and signs, and unique visual presentations that show off certain labels. Since then, Belk has made significant investments in its stores in other cities across the state. Currently, the company is developing a new, $20 million, 170,000-square-foot store in Huntsville’s Bridge Street Town Centre, slated to open in late 2014.
Belk set out to win over Alabama shoppers with remodeled stores and targeted inventory.
“We make moves and try to stay ahead of the trends,” says Jan Clevenger, who chairs Belk’s Western Division, headquartered in Birmingham. “We don’t wait until things go bad and then decide we need to cut expenses. We give everybody a voice, even employees at the lowest levels, and constantly look for ways to be better.”
Clevenger says Belk sets out to develop “fabulous” private brands. Rather than plain and simple, as is often the standard for private-label brands, Belk’s New Directions brand is colorful, profitable and “very Southern,” she says. “A great, growing private brand allows us to offer something special that is different from other stores.”
Belk also partners with leading designers and celebrities to offer exclusive lines. This year, the company’s 125 anniversary, Belk is introducing private labels from Cynthia Rowley and Cam Newton, as well as several new product lines from emerging Southern designers. Winners of Belk’s inaugural Southern Designer Showcase, including Cynthia Rowley, will appear at in-store events and their products will be sold in stores and online at belk.com.
Skillful merchandizing was essential to winning Alabama customers, but almost as important was Belk management’s understanding of the role community contribution plays in cultivating customer loyalty.
Philanthropy has always been a core value of the 125-year-old company, and upon entering Alabama, Belk cemented its place in the community by getting to know the local nonprofits and finding out how to serve them.
“We looked at the relationships that Parisian had in the community and tried to continue those relationships,” says Clevenger. “Not only did we honor those relationships, but we found ways to do even more.”
Belk donates in-kind gifts and lends employees to a variety of causes in Alabama such as the Breast Cancer Research Foundation of Alabama (BCRF), YWCA and Junior League of Birmingham, Huntsville and Mobile. Belk lends its visual team to the YWCA to decorate for its annual Winter Wonderland event, and a group of Belk employees deliver snacks every other week for the children in YWCA’s after-school program.
The BCRF, a nonprofit that raises funds for UAB’s Comprehensive Cancer Center, had long depended on support from Parisian. “When Belk took over, the company sent a team to Birmingham to meet with all the nonprofits that Parisian had supported,” says Dolly O’Neal, BCRF co-founder.
When McKay Belk, then the company’s president and chief merchandising officer, came to tour the Comprehensive Cancer Center, he handed O’Neal his own personal gift to the Foundation, a check for $25,000. “That just cemented what we already knew about the company, that they were strongly committed to doing good in our community,” O’Neal says.
Great Southern Merchandiser Celebrates 125 Years The Old Fashioned Way
This year, Belk is celebrating its 125th anniversary in its traditional manner, with a series of merchandise promotions and community support initiatives.
“It is a very special privilege for Belk to be a part of Southern communities for 125 years, and we don’t take that lightly,” says Johnny Belk, president and chief operating officer of Belk Inc. “We are humbled by that fact and owe our success to the associates who give so much to this company and to our customers. Belk is grounded in the values established by my grandfather, and they are still relevant to our customers today.”
More than 125 exclusive products are available for purchase this year in Belk stores and on belk.com from Belk partners and designers, such as Michael Kors, Ralph Lauren, Jessica Simpson and Sam Edelman. Customers also can register online to participate in 125 Days of Prizes, in which Belk will award a prize valued from $500 to $6,500 every day. The dedicated website for that promotion is belk125prizes.com.
Throughout this year, Belk also is sponsoring community support initiatives. Through a $2 million partnership with the Points of Light Institute, Belk will celebrate 125 Days of Service, and Belk associates will work in local schools to help with makeover projects. The school project, which kicked off in March, will serve 225 schools throughout the Belk footprint.
Nancy Mann Jackson is a Huntsville-based freelance writer for Business Alabama.