UPDATE: February 8, 2019: The shoe retailer is close to another Chapter 11 filing and has plans to shutter most or even all stores in North America, Bloomberg reports, citing unnamed sources. Payless declined to comment to Bloomberg and didn’t immediately return Retail Dive’s request for comment.
Dive Brief:
- Payless ShoeSource has hired investment firm PJ Solomon to help look into its “strategic alternatives,” including a sale or restructuring, unnamed sources told Reuters Tuesday. That could include a bankruptcy filing, according to the report. Payless didn’t immediately return Retail Dive’s request for comment.
- The discount footwear retailer’s lenders late last year were reportedly bracing themselves for such a move, amid falling sales and signs of financial difficulty, Debtwire found.
- Late in 2017 the retailer emerged from bankruptcy with a plan blessed by lenders, who now largely own the company, including shuttering stores and cutting jobs at its headquarters.
Dive Insight:
Payless spent 2018 as a leaner retailer and tried to make a splash in a variety of ways, including opening nine holiday pop-up stores in large industrial spaces with “a more modern look and feel than traditional Payless brick-and-mortar stores” and pulling a comical prank in a former Armani space that had big-spending influencers gushing over upscale “Palessi” merchandise that were actually $30 Payless shoes.
None of that has been enough to spur a level of sales to keep the retailer in the black, however. For the fiscal 2018 quarter ending Aug. 5, sales fell $15 million year-over-year to $426 million, missing expectations by $26 million, according to Debtwire’s earlier report. Same-store sales rose 3.3%, far lower than the 9.9% projected increase, with reduced traffic particularly in North America, Debtwire said.
Payless is among the more than 15% of retailers acquired by private equity firms over the past 15 years that have filed for bankruptcy. In 2012, the company’s former parent, Collective Brands, was taken private in a $1.3 billion transaction involving private equity firms Golden Gate Capital, Blum Capital Partners and Wolverine Worldwide. That left the retailer with debt of $838 million as it entered its 2017 bankruptcy. As it exited, the retailer said it would close 900 stores and shed $435 million in debt — still enough to hobble it going forward.
Recommended Reading:
- Bloomberg Payless Prepares Second Bankruptcy With Store Closures
- Reuters Shoe retailer Payless to explore options, including sale: sources
Krystal L Boyer
Cheap crappy shoes.. and they’re not even cheap anymore
Rachel Duffy PayMore not Payless
Ashley F Vadi exactly, they used to be the go to for a cheap pair of shoes to wear to a wedding or to some event once or twice..But now they’re cheap shoes cost the same amount as a pair good shoes at Macy’s
Rachel Duffy a few years ago I got a pair of simple white sneakers and they cost 30 bucks
Ashley F Vadi .. I feel
Ur pain.. I ran in there to grab A pair of black
Boots because
I had no time for the mall- those things were so not worth the $50 I shelled out!!! ??♀️??♀️
Megan Fulcher
Robin Giberson Doyle I anticipated this lol
They suck anyway.
I had a feeling something was going on, when I walked into a store and it was half empty last spring
that one in our Ocean County Mall going out to ?
Amanda Caldwell
Stephanie Lane Nappe holy shit were gonna be able to online shop soon !!! All these damn stores keep closing !!!!!
I work at Stewarts and Payless randomly closed today and remained closed all day.
JimLynn Walker
Lisa Pasuco Giglio
Megan Fulcher oh wow I had a feeling
Karalyn Smith I anticipated this lol
Sad another one bites the dust
No big loss. Shoes were made like crap.
Hope Elizabeth
Lauren Hayes
Pretty soon we aren’t going to have any stores left the way stores are closing lately.
Gianna Valenti
Nicole Valenti Cutro omg I recently looked in one and I loved the shoes ?
Crappy shoes that all but crippled you. No loss
Nichole Howarth Pardo
Kimberly Howarth MY STORE Samantha Anne
The one in lacey was closed today as well
Denise D’Amico DiMarsico Heather Ribinsky Poss
Kimberly Holland Scaltrito my favorite!!! Ugh I hope they don’t close by us
Denise D’Amico DiMarsico
Dawn Wakula i told you!!!
Michele Hendricks Houser
Raeann Dean MacVicker. Nooooooo
They are one of the few stores that carry my big foot size women’s shoes. ?
Dawn Katelyn!!! Allie Fusco!!
Am I the only one that doesn’t know what “shutter” is?
Sommer Jean yes, the only one. Shutter equates to close. As in shutter the doors, close up shop, etc etc
Sharon Oh ??♀️ Thank you
Samantha ParamonteEmily Ann
Muriel Odrick
Gloria Gonzalez Gigi Munoz Lissette Rosas
they suck anyway ??♀️
Call Al Bundy…
Freehold was closed too
Even in the ocean county mall?
Michele Smith-Rosell Jarred Turner Miranda Machado
Megan Fulcher ???great
I tried to warn everyone, they have been liquidating stock since August
Stacey Hagaman Smith
Dina Newbert Amanda Lopez
Heather Nicole time to do some shopping maybe the jojo shoes will be on sale
Amanda Lopez great point!!!
Nooooooo!@!@
Dina Newbert shopping trip!!!