Payless in Talks to Close 1,000 Stores
Payless Inc. is in talks with its lenders over a restructuring plan that includes closing about 1,000 stores as it wrestles with an unsustainable debt load, according to people with knowledge of the matter. The discount shoe retailer may consider filing for bankruptcy if it’s unable to reach a deal with the creditors, said the people, who asked not to be identified because the information isn’t public. A decision on whether to restructure in or out of court may be reached as soon as this month, they said.
Total Retail's Take: Payless is the latest retailer is to downsize its store count, joining Macy's, Sears, BCBG and Whole Foods, among others. Retailers are making the decision that physical storefronts are on the chopping block as they look to cut costs. Payless, like the others cited above, is struggling with declining store and mall traffic, as well as increased competition online. If the first six weeks of 2017 have taught us anything, it's that traditional brick-and-mortar retailers must evaluate their business models and adapt to changing consumer behavior.
Joe Keenan is the executive editor of Total Retail. Joe has more than 10 years experience covering the retail industry, and enjoys profiling innovative companies and people in the space.