Payless plans second round of mass store closures
Following a request earlier this month to close 389 stores, the mass shoe retailer has requested permission to close another 408 stores. The company filed for bankruptcy in April, and says it could close fewer stores depending on negotiations with property owners.
Payless currently has a hearing date set for June 8 to present its case to a St. Louis bankruptcy court. In considering which stores to close, the company says it will look at profitability, the ability to transfer sales to nearby locations and opportunities to lower rent.
In April, the budget shoe retailer filed for Chapter 11 bankruptcy with $838 million in debt and requested permission to close nearly 400 stores. Courts granted it permission to close that first round of stores in May. The company has said it needs to restructure its model for its physical outposts amidst a challenging retail environment. Other mass retailers with a strong presence in shopping malls to have filed for bankruptcy in recent months include Rue21, The Limited and Wet Seal.
Earlier this month, Payless began an investigation into whether or not its buyout from private equity firm contributed to its bankruptcy. San Francisco private equity funds Golden Gate Capital and Blum Capital currently control the Kansas-based company’s board and received over $350 million in dividends over the past few years.
In total, the Topeka-based shoe retailer currently has more 4,000 stores open around the world, with over 3,000 of its locations in the United States.
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