Payless Store Closings in 2017: Bankruptcy Led Footwear Retailer to Shut Down About 800 Stores

Payless Store Closings in 2017
iStock/tupungato

American discount footwear retail company Payless ShoeSource Inc., like many other other brick-and-mortar stores, filed for Chapter 11 bankruptcy during 2017. To cope with this situation, the company decided to close around 800 stores over the course of the year, or about 20% of the 4,000 stores it operated. Below is a list of Payless store closings in 2017:

Payless’ Complete Store Closings List

  • California – 132 stores
  • Texas – 117 stores
  • New York – 60 stores
  • Florida – 39 stores
  • Indiana – 32 stores
  • Pennsylvania – 26 stores
  • North Carolina – 21 stores
  • Maryland – 19 stores
  • Colorado – 18 stores
  • Michigan – 18 stores
  • Oklahoma  – 18 stores
  • Arizona – 17 stores
  • Arkansas – 17 stores
  • New Jersey – 17 stores
  • Missouri – 16 stores
  • Virginia  – 15 stores
  • Washington – 14 stores
  • Louisiana – 13 stores
  • Puerto Rico – 13 stores
  • Georgia – 12 stores
  • Mississippi – 12 stores
  • Connecticut – 11 stores
  • Kentucky – 10 stores
  • West Virginia – 10 stores
  • Oregon – 9 stores
  • Tennessee – 9 stores
  • Alabama – 8 stores
  • Kansas – 8 stores
  • New Mexico – 7 stores
  • Maine – 5 stores
  • New Hampshire – 4 stores
  • Nebraska – 4 stores
  • South Dakota – 4 stores
  • Hawaii – 3 stores
  • Iowa – 3 stores
  • Nevada  – 3 stores
  • Utah – 3 stores
  • Wyoming – 3 stores
  • District of Columbia  – 2 stores
  • Vermont – 2 stores
  • Alaska – 1 store
  • Rhode Island – 1 store
  • South Carolina – 1 store

The increasing craze for online shopping and the “Amazon effect” are cited as the major reasons for the “retail apocalypse” leading to the Payless store closings in 2017, and many others.Other factors specific to Payless included several months of delays in receiving product deliveries during port tie-ups on the West coast, unspecified purchasing, inventory issues, and incapability of investing in advertising and new technologies.

Payless Store Closings in April 2017: Debt-Laden Footwear Retailer Shut Down Almost 400 Stores

Payless Store has struggled with debt for months, entering bankruptcy in early April 2017. At the time, the company had around $1.0 billion in assets, up to $20.0 billion in liabilities, and more than 100,000 creditors. As a part of its cost-cutting measures, Payless decided to close nearly 400 underperforming locations in 2017. The closures took place in almost every state in the country.

The initial Payless bankruptcy filing enabled court authorization to pay for pre-filing wages, salaries, and benefits; honor customer programs; and pay company vendors and suppliers for all goods.

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The company has planned to make some modifications to balance its real estate lease portfolio; if these measures doesn’t work, it will have to close additional stores. It is reported that the company has also negotiated agreements with certain lenders, who will give Payless up to $385.0 million of debtor-in-possession financing during the Payless restructuring.

Under the reorganization plan, the company hopes to shed debt, attract new capital, boost its e-commerce, and emerge as a strong and competitive organization. The plan includes expansion of omnichannel marketing, which will help customers connect to both Payless’ online store and brick-and-mortar locations. Additionally, Payless is considering international expansion, citing Latin America in particular.

Payless Store Closings in June 2017: Second Round of Closures Increased the Number to 800

After a few months, in June, Payless store shutdowns came to include 112 more stores. The company also went on to request that the U.S. Bankruptcy Court allow the shuttering of another 300 locations.

Moreover, there is a threat to close some 1,000 stores in the future. The company said that it is seeking rent concessions at those locations and that some can hopefully remain open. Payless wished to save nearly 300 stores it had targeted for closure by agreeing upon favorable lease arrangements with landlords, but given the 800 Payless store closings in 2017, the company’s efforts likely proved unsuccessful.

Payless’ restructuring plans may take it to a safer zone in this competitive world of technology. As Andy Warhol once said, “They always say time changes things, but you actually have to change them yourself.”

 

Sources

Payless ShoeSource files for Chapter 11 bankruptcy,” CNBC, April 4, 2017.

Payless to close up to 800 stores in total; see the list,” USA Today, June 1, 2017.

Payless seeks bankruptcy court protection, 400 stores to close,” USA Today, April 4, 2017.

Payless wants to shutter 400+ more stores after first round of closures,” Clark, May 30, 2017.

Payless Shoes Wants to Close 800 Stores This Year,” Money, June 1, 2017.

Payless ShoeSource could close another 400 stores in bankruptcy,” USA Today, May 31, 2017.

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Categories: Branch Closings, News

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