ST. LOUIS, MI—Payless ShoeSource filed for voluntary Chapter 11 bankruptcy protection on Monday and stated that it plans to close all of its North American stores in the US and Canada by the end of May.
The company also reported it intends to file for protection for some of its Canadian subsidiaries under the Companies’ Creditors Arrangement Act (CCAA) in the Ontario Superior Court of Justice. The Topeka, KS-based company intends to wind down operations at its approximately 2,500 store and e-commerce locations in North America. Store closings will begin at the end of March, with many stores remaining open until the end of May as they conduct liquidation sales.
Payless’ retail operations outside of North America, including its company-owned stores in Latin America, are separate legal entities and were not included in the Chapter 11 or CCAA filings. Payless’ 420 stores across 20 countries in Latin America, its stores in the U.S. Virgin Islands, Guam and Saipan, and its 370 international franchisee stores in 16 countries across the Middle East, India, Indonesia, Indochina, Philippines and Africa, will continue operating business as usual, the company states.
Stephen Marotta, who was appointed in January 2019 to serve as chief restructuring officer of Payless, says, ““The challenges facing retailers today are well documented, and unfortunately Payless emerged from its prior reorganization ill-equipped to survive in today’s retail environment. The prior proceedings left the company with too much remaining debt, too large a store footprint and a yet-to-be realized 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.”
Payless filed for bankruptcy protection in April 2017, eliminating more than 700 stores and roughly $435 million in debt, according to CNBC. In its latest bankruptcy filing on Monday, the company reported assets and liabilities in the $500 million to $1 billion range.