At 125, Belk is expanding and embracing change

mcornatzer@newsobserver.comMarch 8, 2013 

Belk, the country’s largest privately-held department store chain, is in the midst of a $600 million-plus spending spree.

The Charlotte-based store is celebrating its 125th year by investing heavily in its existing stores and in e-commerce, building new stores (two this year in Texas and one each in Salisbury and Morganton) and giving back to the community.

Founder Henry Belk’s grandsons, CEO Tim Belk and John R. Belk, the company’s president and chief operating office, run the company. John Belk was at their flagship store in Crabtree Valley Mall this week to talk about Belk’s technology push, its expansion plans, the lesson of J.C. Penney and his grandfather’s values. The following excerpts from his interview have been edited for space and clarity.

On that $600 million investment: “That (amount) is changing daily as we think about areas where we can invest in the company. A lot of the stores in the Raleigh area have already been touched. We’ll invest close to $100 million each year over the next several years in different stores, updating them so that they better match the brand. ... Right now we’re about a $4 billion entity and we’ve said that over the next several years we want to reach $6 billion. To do that we’re going to have to grow our store business, we’re going to have to grow our online business. Mobile is becoming a part of that and we’re going to have to expand into other areas in contiguous markets.”

On expansion plans: “We expect two to four new stores a year (over a five-year period). ... We have a 16-state footprint and about half those states are really core markets – North Carolina, South Carolina, Georgia, Alabama, Mississippi and northern Florida. But as we get into Texas, we see a lot of cities where we don’t have a large presence. We have one store in Missouri. Virginia still represents a lot of opportunity as you go more north.”

On embracing the Internet: “About a year ago about 10 percent of our Internet sales were outside of our 16-state footprint. This past year, right under 20 percent of Internet sales were where there wasn’t a store. For some reason, Chicago and the Illinois area is the No.1 market where we don’t have a store presence. ... We’re beginning to market ourselves more nationally. The Belk Bowl was a part of that. We’re doing more ads in national publications, we’re doing paid search online with Google and other places.”

On adding technology in the stores: “This next year we’ll change out the register systems here in the Crabtree store, we’ll bring in mobile devices and iPads to give our sales associates a lot of tools they haven’t had. We’ll build out Wi-Fi networks in every store. A lot of the technology will be behind mobile shopping.”

On how a regional department store competes nationally: “We really know the Southern lifestyle better than anybody else. We want to have the very best customer experience that represents that lifestyle. It’s all about being welcoming, friendly, energetic.”

On the Belk customer: “From our research we learned that the woman really is our core customer; 89 percent of the purchases a woman buys. Men are really important to us but we realized we need to recognize the woman, how she shops, what’s really important in her life.”

On the problems at JC Penney after CEO Ron Johnson’s changes: “I think some of his concepts make great sense. But a lot in the store did not change, and the transition period has been way too long. … Part of our success has clearly been gaining some market share there and we’re excited about that. We’re a highly competitive organization. There are 218 markets where we compete within three miles of J.C. Penney.”

On Belk’s 2010 brand change to “Modern. Southern. Style”: “We worried a lot about changing the branding statement. … I remember being in our Greensboro store and a customer came very close to kicking me in the shin. … She started chewing me out. ... Change is not always easy, but it’s how you go about it. We have a lot of traditional customers. They like the classic styling and they’re used to that and we did not want to offend them in any way.”

On giving back: “As part of our 125th anniversary, we’re looking on our core values and one that stands out the most is giving back to the community. That’s something my grandfather really believed in. He knew that if you could help build up a community it would make a great place for customers to come and shop. So we’re partnering with an organization called Points of Light. ... We’ll spend $2 million with them and every store, including the Crabtree store, will embrace a school in an at-risk area. We’ll go in and either paint the classrooms or read to the children or build bookcases, whatever the needs are. We’ll have close to 300 schools that we’ll impact. We have close to 23,000 employees and that was one thing they were really excited about.”

Cornatzer: 919-829-4755

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