- Payless has filed for Chapter 11 bankruptcy protection and says it is closing all of its roughly 2,500 stores in North America.
- This is the second time the company has filed for bankruptcy in two years.
The discount shoe retailer Payless ShoeSource filed for bankruptcy late Monday night and announced it would be closing all of its roughly 2,500 North American stores and winding down its e-commerce operations. The Wall Street Journal recently reported that this could be the largest retail liquidation ever in terms of store count.
Liquidation sales are expected to begin imminently, with stores set to close between the end of March and the end of May.
This is the second time in two years that the company has filed for bankruptcy protection. In April 2017, it filed for bankruptcy and then closed 400 stores immediately. A further 500 followed suit shortly after.
“Payless emerged from its prior reorganization ill-equipped to survive in today’s retail environment,” Stephen Marotta, the chief restructuring officer of Payless, said in a statement to the press on Monday.
“The prior proceedings left the company with too much remaining debt, too large a store footprint and yet-to-be-realised systems and corporate overhead structure consolidation. As a consequence, despite our substantial efforts, we were ultimately unable to operate the North American retail and e-commerce operations on a sustainable basis.”
The company said Payless’ stores in Latin America, the US Virgin Islands, Guam and Saipan, and its international franchisee locations across the Middle East, India, Indonesia, Indochina, Philippines, and Africa, will continue operating business as usual.
In its bankruptcy filing, Payless said it employed about 13,700 people in the US, Puerto Rico, the US Virgin Islands, and Guam and 2,400 in Canada. The company said in the bankruptcy filing that it would owe roughly $US9.4 million in wages and benefits to these employees, and it requested authorization from the bankruptcy court to honour this.
Payless says it plans to honour customer gift cards and store credit until March 11 and has asked the court for authorization to allow returns and exchanges on non-final-sale items bought before February 17 through March 1.
Its rewards program has been discontinued.
The discount chain joins a string of retailers including Shopko, Gymboree, and Charlotte Russe that have also filed for bankruptcy in the first two months of 2019.
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