Saks sells 47 stores to Belk, makes deal with bondholders

Saks Inc., the parent of Carson Pirie Scott & Co. in Milwaukee, has completed its sale of 47 Proffitt’s and McRae’s department stores to Belk Inc, according to media reports.

The luxury retailer announced in April it was selling the stores to Belk, which are in 11 southeastern states, for $622 million. Birmingham, Ala.-based Saks is also seeking a buyer for the chains operated by Carson Pirie Scott, which are Boston Store, Younkers, Carson Pirie Scott, Bergner’s, and Herberger’s.

As part of the deal, Charlotte, N.C.-based Belk assumed $1 million in capitalized lease obligations, along with the stores’ operating leases.

The acquisition brings Belk’s total 14-state store count to 275.

Belk is offering employment to all Proffitt’s and McRae’s store employees and will operate the Proffitt’s/McRae’s headquarters in Alcoa, Tenn., until October. Employees in the Alcoa headquarters will either be offered positions with Belk or will be given severance packages.

In a related matter, Saks, which is under a federal probe over payments from vendors, persuaded bondholders to postpone a default by buying back approximately $533 million in bonds, according to media reports.

Holders of the majority of the company’s notes accepted payments to give the company until Oct. 31 to file its annual report, Saks said. The retailer has about $324 million in cash and will receive an additional $620 million from the sale of the Proffitt’s and McRae’s chains to Belk Inc.