Bad news for Payless Shoe store fans, and even worse news for Payless employees. The company just announced it is filing for bankruptcy and will immediately close 400 stores in the U.S. and Puerto Rico. And it’s likely that more store closures are on the way.
The discount shoe store filed for Chapter 11 with less than $1 billion in assets and more than $10 billion in liabilities, which spells further trouble down the road. Evidently, Payless has been discussing restructuring plans with lenders for months. This restructuring plan at one point included closing as many as 1,000 stores—25 percent of the company’s locations.
While it might not be this severe in reality, it’s likely we’ll see a lot more store closures before we see any openings. Payless says it plans to “work to aggressively manage the remaining” locations by way of more store closings aside from the current 400 or modified lease terms.
Payless currently employs nearly 22,000 people in 4,400 stores across 30 countries. Unfortunately, the widespread nature of the chain was not enough to combat the dismal offline retail environment, which played a huge role in the company’s filing for bankruptcy.
“This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify,” Payless CEO W. Paul Jones said in a news release. “We will build a stronger Payless for our customers, vendors and suppliers, associates, business partners and other stakeholders through this process.”