After filing for bankruptcy in April 2017 and emerging from it to reopen four months later, Payless ShoeSource Inc. over the weekend announced its plans to again declare bankruptcy - but this time for good.
The Topeka, Kansas-based discount footwear retailer said it had filed for Chapter 11 and will close all of its 2,100 locations in the United States and Puerto Rico in the next few months. It is expected to formally file for Chapter 11 bankruptcy by the end of this month.
Liquidation sales will begin today (Sunday) and stores will begin closing in March. Most stories will say open until May. Payless will also shut down its online store. A spokesperson said its international franchises and Latin American stores, which consist of 2,500 locations, will not be affected.
The company employs more than 18,000 persons worldwide and reported revenues of $3 billion in 2017.
Analysts said it's common for retailers to use bankruptcy to reorganize by reducing debt and closing stores. These companies often wind-up with a second bankruptcy much like Payless.
The company first filed for Chapter 11 bankruptcy in April 2017 and closed 400 stores. It reorganized and slashed millions of dollars in debt. This move, however, wasn't enough to save the company from a second bankruptcy.
Payless is the latest brick-and-mortar retailer to become a victim of online retailers such as Amazon.com, said CNN. It joins Toys "R" Us, Brookstone and clothing store Charlotte Russe on a steadily growing list of firms unable to compete online, and which have suffered accordingly.
"The pace of disruption in retail is widely acknowledged," said Greg Portell, a partner at consulting firm A.T. Kearney. "Yet, the pace of change inside retailers continues to lag. Many retailers find themselves trapped in a cycle of continuing to chase consumer trends ... Without bold action, the retail landscape will continue to be scattered with bankruptcies."
