After seeking bankruptcy protection in April, Payless ShoeSource is preparing to launch a second round of store closings. The footwear retailer is seeking court approval to trim its retail business by closing up to 408 stores if negotiations with landlords fail to result in rent concessions. Payless is asking to close 112 stores outright, and potentially another 296 if the company can’t get a break on rent from landlords. The court hearing is scheduled for June 8.
Total Retail’s Take: Payless has said that it intends to emerge from Chapter 11 with stores still operating. For a number of retailers, like American Apparel and The Limited, this hasn't been the case. Payless is already in the process of closing 400 of its 4,000 locations, and this second round of shutdowns would double the number of store closings for Payless. Rightsizing its number of stores is critical to Payless recovering as a financially viable company moving forward.