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Belk Stores Services, Inc.

Belk Stores Services, Inc.

2801 West Tyvola Road
Charlotte, North Carolina 28217
U.S.A.
(704) 377-4251
Fax: (704) 342-4320
Web site: http://www.belk.com

Private Company
Incorporated:
1891 as Belk Brothers Company
Employees: 1,450
Sales: $1.7 billion (1996)
SICs: 5311 Department Stores; 5632 Womens Accessory and Specialty Stores.

Still operated by descendants of the founding Belk brothers, Belk Stores Services, Inc. (BSS) is one of the few large family-owned retail entities remaining in the United States. Over its more than one hundred years in business, BSS has evolved from a budget-minded variety store into one of the nations leading department stores. BSS provides merchandising, centralized buying, data processing, market research, legal planning, training, importing and private label procurement services to Belk Corp., a $2 billion confederation of 14 department store partner-ships controlled by the Belk family. Stores in this unorthodox retail conglomeration are located in 14 largely southern states. Though many of the affiliated stores are wholly or partially owned by members of the Belk clan, they are not considered a chain. Thomas Belk Sr., who led the company from 1980 until his death early in 1997, cited this corporate strategy as one of the organizations strengths, noting in a September 1995 interview for WWD that Unlike J.C. Penney or Sears, which tend to be the same everywhere, all of our stores are different, by catering to the community and the personality of the people there.

Late 19th-century Origins

In 1888 William Henry Belk opened a small bargain store in Monroe, North Carolina. The store, New York Racket, was financed with a loan from a local widow, Belks savings, and goods on consignment. The goods prices were clearly marked and not negotiated with customers, an idea that was just becoming accepted in retailing. Within seven months, Belk had gone from being over $4,000 in debt to earning a $3,300 profit.

The founder approached his brother, John Belk, in 1891, to become a partner in the prospering store. Thus the Belk Brothers Company was formed. A second store was opened in 1893 in Chester, South Carolina. A third opened in Union, South Carolina, in 1894, and the following year, William Belk moved to Charlotte, North Carolina, to open the companys fourth store. His brother John remained to manage the Monroe store until his death in 1928. The brothers stores were doing so well by 1895 that other merchants even began to copy its straight-talking slogans like Cheap Goods Sell Themselves and The Cheapest Store on Earth.

William Belks success resulted from some retailing ideas that were innovative for the time. In 1897 he combined the purchasing power of the four stores, plus two others in which the brothers had no financial interest, and formed a loose cooperative buying network. This allowed them to purchase goods in bulk quantity at favorable prices. All purchases and sales were cash. Belk also made extensive use of advertising. The brothers opened a store in Greensboro, North Carolina, in 1899.

Rapid Expansion After Turn of the Century

In the early 1900s, Charlotte was a boom town, expanding along with the textile industry and was the states largest city by 1910. That year, Belk sales approached $1 million, and a new five-story building was unveiled to house the Charlotte store. The companys greatest expansion followed World War I, as the southern economy received a boost. Cotton prices went up, and soldiers came home. Between 1918 and 1920, Belk stores total sales more than doubled to $12 million a year. In 1920 Will LeggettJohn Belks nephew by marriageopened a store with the Belks in Burlington, North Carolina. His brother, Fred Leggett, opened a store in Danville, Virginia, that same yearthe Belk-Leggett. The Belk brothers often added managers names to their own on new stores.

Boom days and postwar prosperity gave way to recession, however, and the Belks retrenched, not opening any stores between 1922 and 1925. In 1925, however, they opened three more stores and three again in 1926. In 1927 the Belks and the Leggett brothers agreed that the Leggetts would own 80 percent of the stores they opened, with Belk Brothers Company owning the remaining 20 percent. In the past, the Belks had always owned the majority of their stores. This arrangement formed the foundation of Belks unusual organizational scheme.

Opportunistic Growth During the Great Depression

The years between 1910 and 1930 were prosperous for retailing. Competition, however, began to creep up on the Belks. Then the stock market crash of 1929 slowed Belks sales growth, but stores stayed open. Belk took advantage of other companies misfortune by acquiring defunct stores, netting 22 stores in 1930 and 1931. In 1934 Belk opened a record 27 stores, expanding geographically into Tennessee and Georgia in the process. By 1938 Charlotte was again a booming southern city and the Belkss headquarters store there expanded. This location evolved into the organizations operational headquarters, consolidating purchasing, assistance with taxes and merchandise distribution, and other services for all affiliated stores. By 1938 Belk was doing business in 162 locations in seven states.

In response to growing competition from such national chains as J.C. Penney, Montgomery Ward, and Sears Roebuck, which were thriving in larger cities, Belk stores were remodeled and expanded. Belk Stores Association had formed in the 1920s, gathering the new store managers for quarterly meetings. By the late 1930s, the group was too large feasibly organize meetings four times a year, so it gathered at annual conventions. Belk Buying Service was formally set up in 1940. World War II defense spending enhanced the economy, and by the wars end, sales were two-and-one-half times what they had been in 1941. This helped pay off Depression debts and feed expansion. The Belks opened 25 stores in 1945 alone and achieved a net increase of more than 60 stores between the end of World War II and the close of the decade. In 1952 founder William Belk died at the age of 89. He had worked as the head of the company right up to his death.

Second Generation of Managers in the Postwar Era

After Belks death, his son Henry took his place. The founders other sons, John and Tom, were also active in the company. Six months after his fathers death, Henry opened the companys first shopping center store in Florida. This store marked a dramatic break from Belk traditions: a New York design firm created a fancy interior, music was played, and merchandise was displayed for self-service. This contrasted sharply with the Belk stores trademark features of spare, no-nonsense decor, and an army of well-trained sales clerks. Henry opened several more stores afterward without consulting his family, and by 1955 legal disputes were brewing among family members and other shareholders. Although lawsuits were filed, they eventually were dropped. Later that year, Belk Stores Services, Inc., was established to make a formal organization out of what had long been an operating entity. The BSS board then elected John Belk as president, leaving Henry to his Florida pursuit, the Belk-Lindsey Company. Though BSS cut all ties with Henrys chain of department stores in November 1955, family feuding would continue throughout the next four decades. John would later advance to chairman of BSS, with Tom as president.

By this time, the Belks private-label business was thriving. By 1959 it accounted for a major share of the buying offices inventory. In the late 1950s, the Belks department stores had nearly peaked in the South, with 325 stores in 16 states. In 1956 Belk acquired its only viable competitor in the region, the Efird department stores.

Modernization Program Begins in 1960s

During the 1960s, the company had to adjust to a changing retail environment in the South. Stores that could once count on their reputations as local institutions found themselves in the midst of a highly mobile population that was attracted to the offerings of big-city stores. The largely autonomous and diver-gent stores making up the Belk group were not prepared to compete. A more mobile society, newly popular shopping centers, and the Souths expanding economy presented BSS with the task of uniting its network of stores.

In 1958 there were 380 stores in 17 states. By 1963 the stores were, for the first time, presented to the public as a unit, instead of the string of independent operations they had been. Change was still slow, however. At a time when more buyers were using credit, 87 percent of Belks sales were still cash. In 1967 extensive meetings were held by BSS and its long-range planning committees to chart the companys future.

Company Perspectives:

The mission of Belk corporations and their stores is to be the leader in their markets in selling merchandise that meets customers needs for fashion, quality, value and selection; to offer superior customer service; and to make a reasonable profit. Reflecting the beliefs of the founders of the various Belk corporations, Belk stores want their customers to have a feeling of confidence that they will receive honest and fair treatment, that they will get full value for every dollar, and that they will be satisfied in every respect so that they will want to shop with Belk stores again. Belk stores have a responsibility to the people who make their growth and success possible. They are committed to maintaining relationships of integrity, honesty, and fairness with customers, associates, vendors, other business partners, stockholders, and with all people in every community they serve.

Meanwhile, more stores were added to the fold: 14 opened in 1969 and 16 in 1970. The new stores were larger and used modern management techniques, such as computerized payrolls and centralized personnel departments. As planning and coordination gained in importance, so did BSSs role. By assuming more leadership, it accelerated the changes as the stores moved from budget to fashion merchandise. Expansion continuedbetween 1972 and 1975, more than 50 stores were opened. Several of the companys signature downtown stores were closed in favor of stores in the prospering outlying malls. Credit and data processing systems were centralized and upgraded. Another change was Belks pursuit of upscale brand names. Estee Lauder, a brand of cosmetics, was aggressively wooed until it was added to product lines in 1975. Even Belk stores in smaller towns upgraded their look and merchandise. This served to add new customers to an already loyal clientele.

Under the direction of President and CEO Thomas Belk beginning in 1980, the company succeeded in making the transition to meeting the demand of style-conscious shoppers of the 1970s and 1980s, as opposed to the previous demand for thrift, durability, and value. For example, Belk hosted its first fashion buying show in New York in 1983, and within four years, representatives from the nations top fashion lines were competing for representation in the show. This further consolidated buying and proved Belks place in the fashion retail market. Marking the change from bargain chain to fashion stores was top designer Oscar de la Rentas appearance at a grand re-opening of a Belk store in 1986. Though some stores retained the small-town, bargain-budget flavor of Belks founders vision, others moved to suburban malls and shopping centers. The company celebrated its 100th birthday in 1988 while opening a huge new BSS office complex in Charlotte. The company would later close its New York office and consolidate buying operations at the new facility.

The 1990s and Beyond

Though the retail industry in general and the department store segment in particular were disrupted by recession, competition from mega-discounters, mergers, and multi-billion-dollar bankruptcies in the early 1990s, one observer characterized Belk Stores as a rock of stability. The company achieved this constancy through a series of well-considered divestments and acquisitions. In an effort to focus on its strongest markets, the company sold a few stores in marginal markets, maintaining its strongholds in North and South Carolina. Hot on the heels of rumors that longtime affiliate Leggett Stores Inc. was negotiating a merger with Dillard Department Stores Inc., Belks parent company purchased a controlling interest in the Virginia-based chain in the fall of 1996. The addition of Leggetts more than 40 stores increased Belk Corp.s amalgamation of stores by nearly 20 percent and, perhaps more importantly, ensured the continuation of Leggetts long-running affiliation with Belk Stores Services.

Belk Stores withstood an unplanned management transition in January 1997, when 71-year-old Thomas Belk died following gall bladder surgery. His three sons, Thomas M. Tim Belk Jr., H.W. McKay Belk, and John R. Belk shared the title of president and divided merchandising and operating responsibilities among themselves. Strategies for the future included cost reduction, consolidation of operations with a special focus on inventory management, and a continuing emphasis on the customer.

Further Reading

Battling Belks: Maul in the Family, Business North Carolina, December 1993, pp. 1415.

Belk Corp. buying Majority Stake in Leggett Chain, Daily News Record, September 16, 1996, p. 13.

Blueweiss, Herbert, Belks Beginning the Next 100 Years, Daily News Record, January 16, 1989, p. 48.

Covington, Howard, Belk: A Century of Retail Leadership, Chapel Hill: University of North Carolina Press, 1988.

Lee, Georgia, Tom Belk: After Drought, Womens Seeing Revival, WWD, September 13, 1995, p. 18.

Lee, Georgia and David Moin, Thomas M. Belk, 71 Belk Stores President, Dies in Charlotte, WWD, January 28, 1997, pp. 12.

Palmieri, Jean E., Many Department Stores Still Clicking; Belk, Daily News Record, January 17, 1990, p. 10.

Three Belk Brothers Promoted, Daily News Record, March 3, 1997, p. 2.

Carol I. Keeley

updated by April D. Gasbarre

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Belk Stores Services, Inc.

Belk Stores Services, Inc.

2801 West Tyvola Road
Charlotte, North Carolina 28217
U.S.A.
(704) 357-1000
Fax: (704) 357-1876

Private Company
Incorporated: 1955
Employees: 35,000
Sales: $2.98 billion

Belk Stores Services, Inc. (BSS) dates back to a small bargain store opened in 1888 that grew to be the U.S.s largest family-and management-owned department store organization. BSS provides centralized buying, data processing, market research, legal planning, training, and development for about 300 Belk and Leggett stores, which are primarily fashion department stores and are located in 14 states, largely in the southern United States. The stores are not a chain; various numbers of the stores are owned by several different corporations.

In 1888 William Henry Belk opened a small bargain store in Monroe, North Carolina. The store, New York Racket, was financed with a loan from a local widow, Belks savings, and goods on consignment. The goods prices were clearly marked and not negotiated with customers, an idea that was just becoming accepted in retailing. Seven months later, Belks books showed significant profits.

The founder approached his brother, John Belk, in 1891, to become a partner in the prospering store. Thus the Belk Brothers Company was formed. A second store was opened in 1893 in Chester, South Carolina. A third opened in Union, South Carolina, in 1894, and the following year, William Belk moved to Charlotte, North Carolina, to open the companys fourth store. His brother John remained to manage the Monroe store until his death in 1928. The brothers stores were doing so well by 1895 that other merchants began to copy even their slogans.

William Belks success resulted from some retailing ideas that were innovative for the time. In 1897 he combined the purchasing power of the four stores, plus two others in which the brothers had no financial interest, and formed a loose cooperative buying network. This allowed them to purchase goods in bulk quantity at favorable prices. All purchases and sales were cash. Belk also made extensive use of advertising. The brothers opened a store in Greensboro, North Carolina, in 1899.

In the early 1900s, Charlotte was a boom town, expanding along with the textile industry and was the states largest city by 1910. That year, Belk sales approached $1 million, and a new five-story building was unveiled to house the Charlotte store. The companys greatest expansion followed World War I, as the southern economy received a boost. Cotton prices went up, and soldiers came home. Between 1918 and 1920, Belk stores total sales more than doubled, to $12 million a year. In 1920 Will LeggettJohn Belks nephew by marriageopened a store with the Belks in Burlington, North Carolina. His brother Fred Leggett opened a store in Danville, Virginia, that same yearthe Belk-Leggett. The Belk brothers often added managers names to their own on new stores.

Boom days and postwar prosperity gave way to recession, however, and the Belks retrenched, not opening any stores between 1922 and 1925. In 1925, however, they opened three more stores and three again in 1926. In 1927 the Belks and the Leggett brothers agreed that the Leggetts would own 80% of the stores they opened, with Belk Brothers Company owning the remaining 20%. In the past, the Belks had always owned the majority of their stores.

The years between 1910 and 1930 were prosperous for retailing. Competition, however, began to creep up on the Belks. Then the stock market crash of 1929 slowed Belks sales growth, but stores stayed open. While other companies stores closed, Belk acquired 22 stores in 1930 and 1931. In 1934 Belk opened 27 stores, the most it had ever opened in a single year. These included locations in Tennessee and Georgia. By 1938 Charlotte was again a booming southern city, and the Belkss headquarters store there expanded. Through this store, consolidated purchasing services, assistance with taxes and merchandise distribution, and other services were offered to all stores. In 1938 Belk was doing business in 162 locations in seven states. The stores, however, faced competitive challenges from national chains such as J.C. Penney, Montgomery Ward, and Sears Roebuck, which were thriving in larger cities.

In response, Belk stores were remodeled and expanded. Belk Stores Association had formed in the 1920s, gathering the new store managers for quarterly meetings. By the late 1930s, the group was too large feasibly organize meetings four times a year, so it gathered at annual conventions. Belk Buying Service was formally set up in 1940. World War II defense spending enhanced the economy, and by the wars end, sales were two-and-one-half times what they had been in 1941. This helped pay off Depression debts and feed expansion. In 1946 the Belks opened 25 stores. Altogether they opened more than 60 stores between the end of World War II and the close of the decade. In 1952 founder William Belk died at the age of 89. He had worked as the head of the company right up to his death.

After Belks death, his son Henry took his place. The founders other sons, John and Tom, were also active in the company. Six months after his fathers death, Henry opened the companys first shopping center store, in Florida. This store marked a dramatic break from Belk traditions: a New York design firm created a fancy interior, music was played, and merchandise was displayed for self-service. This contrasted sharply with the Belk stores trademark features of spare, nononsense decor, and an army of well-trained sales clerks. Henry opened several more stores afterward without consulting his family, and by 1955 legal disputes were brewing among family members and other shareholders. Although law suits were filed, they eventually were dropped. Later that year, Belk Stores Services, Inc., was established to make a formal organization out of what had long been an operating entity. The BSS board then elected John Belk as president, leaving Henry to his Florida pursuit, the Belk-Lindsey Company. In November 1955 BSS cut all ties with Henrys company. John eventually become chairman of BSS, with Tom as president.

The Belks private-label business was thriving by 1954. By 1959 it accounted for a major share of the buying offices inventory. In the late 1950s, the Belks department stores had nearly peaked in the South, with 325 stores in 16 states. In 1956 Belk acquired its only real competitor in the region, the Efird department stores.

During the 1960s, the company had to adjust to the changing South. Stores that were once local institutions found themselves in the midst of a highly mobile population that was attracted to the offerings of big-city stores. The largely autonomous and divergent stores making up the Belk group were not prepared to compete. A more mobile society, newly popular shopping centers, and the souths expanding economy presented BSS with the task of uniting its network of stores.

In 1958 there were 380 stores in 17 states. By 1963 the stores were, for the first time, presented to the public as a unit, instead of the string of independent operations they had been. Change was still slow, however. At a time when more buyers were using credit, 87% of Belks sales were still cash. In 1967 extensive meetings were held by BSS and its long-range planning committees to chart the companys future.

Meanwhile, more stores were added to the fold: 14 opened in 1969 and 16 in 1970. The new stores were larger and used modern management techniques, such as computerized payrolls and centralized personnel departments. As planning and coordination gained in importance, so did BSSs role. By as-suming more leadership, it accelerated the changes as the stores moved from budget to fashion merchandise. Expansion continuedbetween 1972 and 1975, more than 50 stores were opened. Several of the companys signature downtown stores were closed in favor of stores in the prospering outlying malls. Credit and data processing systems were centralized and upgraded. Another change was Belks pursuit of upscale brand names. Estee Lauder, a brand of cosmetics, was aggressively wooed until it was added to product lines in 1975. Even Belk stores in smaller towns upgraded their look and merchandise. This served to add new customers to an already loyal clientele.

Belk had had a buying office in New York since 1924, but it was not until 1983 that it had its first fashion buying show in the city. Four years later, representatives from the nations top fashion lines were competing for sites in the show. This further consolidated buying and proved Belks place in the fashion retail market. Marking the change from bargain chain to fashion stores was top designer Oscar de 1a Rentas appearance at a grand reopening of a Belk store in 1986. The company celebrated its 100th birthday in 1988 while opening a huge new BSS office complex in Charlotte.

BSS stores succeeded in meeting the demand of styleconscious shoppers in the 1970s and 1980s, as opposed to the previous demand for thrift, durability, and value. Belk also succeeded in transplanting itself from downtown areas to outlying malls. The 1990s constellation of stores reflected variation; some stores retained the bargain-budget flavor of Belks founders vision. The consolidated planning, distribution, buying power, and administrative legal resources of BSS, however, rendered even the smallest Belk store competitive.

Further Reading

Covington, Howard, Belk: A Century of Retail Leadership, Chapel Hill, University of North Carolina Press, 1988.

Carol I. Keeley

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"Belk Stores Services, Inc.." International Directory of Company Histories. . Encyclopedia.com. 18 Oct. 2017 <http://www.encyclopedia.com>.

"Belk Stores Services, Inc.." International Directory of Company Histories. . Encyclopedia.com. (October 18, 2017). http://www.encyclopedia.com/books/politics-and-business-magazines/belk-stores-services-inc

"Belk Stores Services, Inc.." International Directory of Company Histories. . Retrieved October 18, 2017 from Encyclopedia.com: http://www.encyclopedia.com/books/politics-and-business-magazines/belk-stores-services-inc