Payless ShoeSource is the most recent retailer to fall on hard times claiming financial problems as it filed for Chapter 11 bankruptcy on Tuesday, April 4, 2017, in Missouri. The shoe seller spoke up about its being in distress financially causing for them to restructure, and close almost 400 of its stores immediately in the U.S. and Puerto Rico.
As people scramble to find if their favorite Payless ShoeSource store will be among the closing, the company announced that this may only be the beginning. It appears that as Payless works to organize its portfolio it may see fit to announce even more closures.
Payless ShoeSource Is Newest Brick and Mortar Casualty
Many brick and mortar retailers have been seeing tough times, as they struggle to fight for customers who have the ease to shop from the comfort of home. Payless ShoeSource follows nine major retail corporations, in the first quarter of 2017 alone, that have filed for bankruptcy. RadioShack, The Limited, J. Crew, and Gymboree have been joined by the huge department stores Macy’s, and J.C. Penney in declaring closures for this year.
With lender support, Payless ShoeSource has the goal to cut its load of debt in half. As per court filings, the company will put efforts into building an online presence in order to continue operating. Payless has taken notice of the detrimental effect that depending on being only a brick and mortar has had on the company, leaving it with lower earnings and in debt.
The corporation’s chief executive W. Paul Jones made a thoughtful statement with a clear message of hope that Payless ShoeSource will bounce back.
This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify. We will build a stronger Payless for our customers, vendors and suppliers, associates, business partners and other stakeholders through this process.
Payless ShoeSource was founded in 1956 in Topeka, Kan. It has since grown to 3,500 stores in the U.S. with a total of 4,400 stores globally and employs 22,000 employees. Leading up to the sudden announcement of immediate store closings, Payless ShoeSource had already closed 198 stores just ahead of the bankruptcy filing.
Payless ShoeSource Names Stores to be Closed
The company has long been a destination for shoppers looking for affordable sneakers, boots, and a variety of shoe styles. Accordingly, Payless ShoeSource has sold products by celebrities including Tyra Banks, Sam Worthington and, Star Jones. It is fitting that the show company calls itself the “largest specialty family footwear retailer in the Western Hemisphere,” as it has been the go-to shoe source for parents and children. In line with that, Payless ShoeSource holds agreements for licensing with children favorites Disney, Marvel, and Star Wars.
With the unexpected closing statement, it is causing thousands of employees and patrons of Payless to agonize scrambling to find out what stores are closing. In its financial distress, Payless ShoeSource has declared which of the almost 400 Stores will be closing and where they are. The largest number of stores shuttered will be in Texas, with 66 to close in that state.
It appears that California will have the second largest amount of closures set at 49, followed by New York with 22, and 17 in Florida. Eight other states will see a closing of more than 10 stores, with Alaska only seeing one store shuttering its doors. Eleven stores will be shutting down in Puerto Rico. To date, the plans include the of 389 Payless ShoeSource stores.
If the restructuring plans do not work, it is evident that the Payless ShoeSource company will have to make more closures. According to analysts, almost 400 stores scheduled to close due to financial distress make up $200 million of the footwear sales in the United States.
By Carol Ruth Weber
Edited by Cathy Milne
The Washington Post: America is ‘over-stored’ and Payless ShoeSource is the latest victim
Forbes: Payless Shoes Joins Long List Of Brick-and-Mortar Retailers Seeking Refuge In Chapter 11
Market Watch: Want to know if your local Payless ShoeSource store is closing?
Featured and Top Image by Michael Rivera Courtesy of Wikimedia – Creative Commons License
Inset Image by Dwight Burdette Courtesy of Wikimedia – Creative Commons License