Payless Files for Bankruptcy, Will Close 400 Stores Immediately
Payless ShoeSource filed for Chapter 11 bankruptcy protection on Tuesday, saying it needed to shore up its balance sheet in order to position itself for long-term survival in an increasingly tough retail landscape. The discount shoe retailer plans to immediately close 400 stores in the U.S. and Puerto Rico, and will also "aggressively manage" the rest of its real estate portfolio. That will mean closing additional stores and seeking to modify existing lease terms. Payless currently has 4,400 stores in more than 30 countries.
Total Retail's Take: Another brick-and-mortar retailer is turning to bankruptcy — and store closures — as a last resort to save its business. Payless recognizes that the current challenges for traditional store-based retailers — declining store traffic, expensive leases — are likely to continue, so it's making a move to try and reorganize its organization while reducing debt. The company will be investing in international markets that offer growth opportunities, particularly Latin America, as well as bolstering its e-commerce business and making changes to its merchandise assortment.