Payless might seek bankruptcy protection
Discount footwear chain could close as many as 500 stores
Discount footwear chain Payless ShoeSource reportedly may seek bankruptcy court protection and close as many as 500 stores as the Kansas-based company joins other retailers struggling with a consumer shift to online shopping.
Payless initially plans to shut down 400 to 500 stores as part of its latest reorganization. That number is fewer than the projected 1,000 locations eyed earlier, Bloomberg News reported, citing people familiar with the issue.
Company spokeswoman Cristi Allen in an email Wednesday declined to comment on the report.
Founded in Topeka in 1956, Payless offered a new retailing experience, enabling customers to self-select footwear with affordable prices. The company says it now is the largest specialty family footwear retailer in the Western Hemisphere, with more than 4,000 locations in 30 countries and nearly 22,000 employees.
The company is owned by Golden Gate Capital and Blum Capital Partners, San Franciscobased private equity firms that took over the retailer in 2012 as part of the $2 billion breakup of Collective Brands. The transaction included the assumption of Collective Brands debt.
Payless last year tried to boost profits with a new master plan based on opening more of the company’s Super Stores — larger locations with deeper stocks of footwear brands and styles, as well as an added focus on shopping experience — according to a
Footwear News report. That plan called for closing 350 to 500 smaller stores within three years, the report said.
Company officials also said Payless was undertaking aggressive moves to deal with consumer shifts to e-commerce.