After three generations of family ownership, Belk Inc., a department store chain founded in 1888 by William Henry Belk, was acquired by a private equity firm in 2015. Ask Tim Belk, a member of the third generation and Belk’s former CEO, about the reasons behind the sale, and he will be quick to tell you that the company was not looking to sell. Why, then, the decision to sell after more than a century of family ownership? For Tim and the other members of his generation, it came down to the business’s top duty to shareholders: being good stewards of the family wealth and maximizing shareholder value.
We recently sat down with Tim to discuss what running a family business entails, the process of selling his family’s 127-year-old company and why organic farming is one of his post-Belk ventures.
Brown Brothers Harriman: Tell us about your professional background and how you came to work for the family business.
Tim Belk: I felt welcome at Belk after college; however, instead of going to work there and realizing it was not the right fit, I thought it would be better to work somewhere else and then decide that I really wanted to work at Belk. After working on a political campaign and then in Washington, D.C., I eventually decided I wanted to work in the family business, so I went to business school and then joined.
BBH: What was the path like when you got there? How did you eventually become CEO?
TB: I started at the bottom and had many different jobs over the years. After working in various roles in some of our stores, from the toy department to buying to advertising, I went over to corporate. There, I worked in real estate and human resources, and then had the responsibility of overseeing several of our stores and partner groups.
After my father died in 1997, my two brothers and I became direct reports to my uncle, who was modernizing the company. He made the big decisions, and we implemented. Over time, he consolidated the 112 corporations we had into one and centralized our management and legal structure. In the early 2000s, when my uncle was in his 80s, my brothers and I started wondering what his succession plan was. We were a big company, so we knew that communication around his eventual departure from the business, whenever that might occur, would be important. We also wanted to make sure it was a smooth leadership transition, whether it involved an outsider coming in or one of us taking over. So, one day we asked him what his plan was. He didn’t respond right away. About six months later, he pulled us into a conference room and said, “Tim will be chairman and CEO, McKay will be promoted to president and chief merchant, and Johnny will be president and COO.” That meeting lasted about five minutes.
We had to decide if we could work together under the new arrangement. One of the first things we did was hire a business coach to help us with communication and to identify where we could improve. Then, we set our sights on growth. We had a big acquisition in 2005 and another in 2006. At the same time, we were opening stores. Things accelerated quickly.