CLOSE The discount shoe retailer Payless ShoeSource is set to close all of its stores when its files for bankruptcy later this month. Veuer's Mercer Morrison has the story. Buzz60

Payless ShoeSource filed for Chapter 11 bankruptcy protection late Monday with plans to close all of its stores in the U.S. and Canada.

The widely anticipated move marks the Topeka, Kansas-based retailer's second bankruptcy filing in about as many years.

The first time, the company arranged a deal to cut debts accumulated through a private equity deal, close struggling stores and emerge from bankruptcy in 2017 with a chance to survive.

This time, the company is entering bankruptcy with plans to close all of its approximately 2,500 locations in the U.S. and Canada. The company has already ended online sales.

Liquidation sales were set to begin as soon as Sunday. Some stores will be closed by the end of March, while "many" will remain open through the end of May, Payless said late Monday.

“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," Payless chief restructuring officer Stephen Marotta said in a statement. "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."

The retailer is expected to honor gift cards and store credit through March 11.

Payless locations in about three dozen other countries, including 420 company-owned stores and 370 international franchisee stores, will remain open.

The company's collapse comes amid a wave of challenges for mall retailers, including declining foot traffic, digital competition and the changing tastes of shoppers.

File photo taken in 2014 shows shoppers at a Payless ShoeSource location at the Superstition Springs Center in Mesa, Arizona. (Photo: Dominic Valente/The Republic, Dominic Valente/The Republic, Do)

But it wasn't just industry trends that led to the company's demise.

Major disruptions in the company's supply chain hurt its 2017 holiday shopping season, and a paralyzing computer system breakdown in summer 2018 undermined its back-to-school sales.

Payless found itself with an "oversupply of inventory in the fall of 2018 leading into the winter of 2019" and it was "forced to sell merchandise at steep markdowns, which depressed margins and drained liquidity," according to a court filing. "Customers filled their closets with these deeply discounted products, which served to reduce customer demand for new product."

The company said it sold "millions of pairs of shoes" for below-market prices, leading to a loss of $66 million in 2018, compared to a loss of $11 million in 2017.

Payless, which closed about 900 stores during its first bankruptcy, had more than 3,500 remaining in 40 countries and about 18,000 employees as of September.

The company's bankruptcy petition cited debts and assets of between $500 million and $1 billion.

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Payless listed several Chinese companies, including footwear suppliers, among its largest unsecured creditors.

Founded in 1956, Payless helped pioneer the retailing strategy of enabling consumers to self-select their buying choices.

But in recent years, the chain had a limited digital presence, prices that had crept too high over time and nimble physical competition.

After its first bankruptcy, the company had planned to cut prices and help other retailers service their shoe inventory or sales while adopting the treasure-hunt nature of successful retailers like T.J. Maxx and Marshalls.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.

Read or Share this story: https://www.usatoday.com/story/money/2019/02/19/payless-shoesource-chapter-11-bankruptcy/2913106002/</s>Feb 18 (Reuters) - U.S. discount retailer Payless ShoeSource Inc filed for voluntary Chapter 11 bankruptcy protection along with its North American subsidiaries on Monday and said it will wind down all North American stores by the end of May.

The company said it will close about 2,500 stores in North America starting from the end of March and wind down its e-commerce operations.

The retailer listed both assets and liabilities in a range of $500 million to $1 billion in a filing in the U.S. Bankruptcy Court for the Eastern District of Missouri. (Reporting by Ishita Chigilli Palli in Bengaluru; Editing by Subhranshu Sahu)</s>Payless updated the number of stores it is closing to 2,500, up from the 2,100 it cited on Friday when it confirmed it was planning to liquidate its business. It reiterated that stores will remain open until at least the end of March and the majority will remain open until May.

NEW YORK — Payless ShoeSource has filed for Chapter 11 bankruptcy protection and is shuttering its remaining stores in North America.

The filing on Monday came a day after the shoe chain began holding going-out-of-business sales at its North American stores.

The company, based in Topeka, Kansas, updated the number of stores it is closing to 2,500, up from the 2,100 it cited on Friday when it confirmed it was planning to liquidate its business. It reiterated that stores will remain open until at least the end of March and the majority will remain open until May.

The liquidation doesn't affect its franchise operations or its Latin American stores, which remain open for business as usual, it said.

The debt-burdened chain filed for Chapter 11 bankruptcy protection a first time in April 2017, closing hundreds of stores as part of its reorganization.

"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," said Stephen Marotta, Payless ShoeSource's chief restructuring officer.

He noted that the prior Chapter 11 proceedings left the company with too much debt and with too many stores.</s>NEW YORK (AP) - Payless ShoeSource has filed for Chapter 11 bankruptcy protection and is shuttering its remaining stores in North America.

The filing on Monday came a day after the shoe chain began holding going-out-of-business sales at its North American stores.

The company, based in Topeka, Kansas, updated the number of stores it is closing to 2,500, up from the 2,100 it cited on Friday when it confirmed it was planning to liquidate its business. It reiterated that stores will remain open until at least the end of March and the majority will remain open until May.

The liquidation doesn't affect its franchise operations or its Latin American stores, which remain open for business as usual, it said.

The debt-burdened chain filed for Chapter 11 bankruptcy protection a first time in April 2017, closing hundreds of stores as part of its reorganization.

"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," said Stephen Marotta, Payless ShoeSource's chief restructuring officer.

FILE- In this May 18, 2006, file photo a worker puts the finishing touches on a sign unveiling the company's new look at a Payless Shoesource store at a mall in Independence, Mo. Payless ShoeSource has filed for Chapter 11 bankruptcy protection and is shuttering its remaining stores in North America. The filing on Monday, Feb. 18, 2019, came a day after the shoe chain began holding going-out-of-business sales at its North American stores. (AP Photo/Charlie Riedel, File)

He noted that the prior Chapter 11 proceedings left the company with too much debt and with too many stores.</s>New York – Payless ShoeSource has filed for Chapter 11 bankruptcy protection and is shuttering its remaining stores in North America.

The filing on Monday came a day after the shoe chain began holding going-out-of-business sales at its North American stores.

The company, based in Topeka, Kansas, updated the number of stores it is closing to 2,500, up from the 2,100 it cited on Friday when it confirmed it was planning to liquidate its business. It reiterated that stores will remain open until at least the end of March and the majority will remain open until May.

The liquidation doesn’t affect its franchise operations or its Latin American stores, which remain open for business as usual, it said.

The debt-burdened chain filed for Chapter 11 bankruptcy protection a first time in April 2017, closing hundreds of stores as part of its reorganization.

“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,” said Stephen Marotta, Payless ShoeSource’s chief restructuring officer.

He noted that the prior Chapter 11 proceedings left the company with too much debt and with too many stores.</s>Payless ShoeSource filed for Chapter 11 bankruptcy protection late Monday with plans to close all of its stores in the U.S. and Canada.

The widely anticipated move marks the Topeka, Kansas-based retailer's second bankruptcy filing in about as many years.

The first time, the company arranged a deal to cut debts accumulated through a private equity deal, close struggling stores and emerge from bankruptcy in 2017 with a chance to survive.

This time, the company is entering bankruptcy with plans to close all of its about 2,500 locations in the U.S. and Canada. The company has already ended online sales.

Liquidation sales were set to begin as soon as Sunday. Some stores will be closed by the end of March, while "many" will remain open through the end of May, Payless said late Monday.

"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," Payless chief restructuring officer Stephen Marotta said in a statement. "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."

The retailer is expected to honor gift cards and store credit through March 11.

Payless locations in about three dozen other countries, including 420 company-owned stores and 370 international franchisee stores, will remain open.

The company's collapse comes amid a wave of challenges for mall retailers, including declining foot traffic, digital competition and the changing tastes of shoppers.

Payless, which closed about 900 stores during its first bankruptcy, had more than 3,500 remaining in 40 countries and about 18,000 employees as of September.</s>Payless ShoeSource has filed for Chapter 11 bankruptcy and is shuttering its remaining stores in North America.

The filing on Monday occurred a day after it began holding going-out-of-business sales at its North American stores. The shoe chain, based in Topeka, Kansas, updated the number it plans to shutter to 2,500 stores, up from 2,100 on Friday when it confirmed it was planning to liquidate its business. It reiterated that stores will remain open until at least the end of March and the majority will remain open until May.

Find the nearest Payless ShoeSource to you

The liquidation doesn't affect its franchise operations or its Latin American stores, which remain open for business as usual, it said.

The debt-burdened chain filed for Chapter 11 bankruptcy protection the first time around in April 2017, closing hundreds of stores.</s>A Chapter 11 filing would be the second for the shoe retailer in less than two years amid heavy debt and online competition.

Discount footwear chain Payless Shoesource is preparing to file for bankruptcy again after failing to revive its business amid crippling debt and competition from online rivals.

According to Reuters, Payless will close all of its approximately 2,300 stores in the U.S. and Puerto Rice when it files for bankruptcy later this month. It would likely be the largest-ever retailer liquidation by number of stores, The Wall Street Journal said.

“The move would make Payless one of the most high-profile victims of the string of bankruptcies that have hit the brick-and-mortar retail sector as more shopping is done online,” Reuters said.

The Topeka, Kan.-based company, which once billed itself as the “largest specialty family footwear retailer in the Western Hemisphere,” previously filed Chapter 11 in April 2017. As part of its reorganization plan, it closed nearly 400 stores and reduced its debt burden.

The private-equity buyout of Payless parent Collective Brands in 2012 had left the retailer with $838 million in debt going into bankruptcy. It emerged from Chapter 11 in August 2017 with about $400 million in loans and new ownership including hedge fund Alden Global Capital.

But as The New York Times reports, “bankruptcy has helped retailers shed their debt, but it has not helped many of them restructure their businesses and regain sales.”

“Keeping up with emerging fashion trends and creating attractive stores requires constant investment, which was a challenge for Payless,” the Times noted.

Toys “R” Us and The Bon-Ton Stores are among the retailers that shut their stores in liquidations in the past 12 months. Sears was recently saved from liquidation by its billionaire CEO, Eddie Lampert.

There is still a small chance a buyer could emerge for Payless after it files for bankruptcy, sources familiar with the matter told Reuters. In the meantime, the company is preparing to run going-out-of-business sales at its shops in the next week, one of the sources said.

A Payless spokesperson said the liquidation will not affect its international franchises and Latin American stores.</s>The discount shoe retailer Payless ShoeSource will close all of its remaining stores, about 2,100 locations, in the United States and Puerto Rico, CNN reported.

Liquidation sales already have started, and stores will be starting to shut down in March, with many staying open until May, according to CNN.

Gift cards and store credit will be honored through March 11, USA Today reported.

There are more than a dozen Payless store locations in western Pennsylvania.

RELATED HEADLINE: Report: Payless set to shutter all stores, file for bankruptcy

The online store is also expected to shut down, as the company filed Chapter 11 Tuesday, according to USA Today.

The bankruptcy petition said the company had debts and assets of between $500 million and $1 billion, according to the newspaper.

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The move will not affect franchised or Latin American stores, CNBC reported.

Company owners have been trying to find someone to buy the chain but have not been able to make a deal, a source told Reuters last week.

This was the second time the company has filed for bankruptcy, the first was in April 2017. It came out of the bankruptcy status more than a year ago, still having $400 million in loans from a previous total of $800 million, court filings showed and creditors took ownership of Payless, Reuters reported.

“The challenges facing retailers today or well documented, and unfortunately Payless emerged from its prior reorganization ill-equipped to survive in today’s retail environment,” Payless Chief Restructuring Officer Stephen Marotta told media outlets, including CNBC, in a statement. “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.”

RELATED HEADLINE: Payless becomes Palessi to prove point in new advertising campaign

Payless also closed about 900 stores during its first bankruptcy, USA Today reported.

Payless was founded in 1956 in Topeka, Kansas, according to Bloomberg.

It had about 3,500 stores in 40 countries and employed about 18,000 people as of last fall, USA Today reported.</s>The company plans to close all of its stores in the U.S. and Canada, according to USA Today. This is the second time Payless has filed bankruptcy in as many years.

Reports say the company has already ended online sales.

Liquidation sales were set to begin as soon as Sunday. Officials say some stores will be closed by the end of March, while "many" will remain open through the end of May.

"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," said Payless Chief Restructuring Officer Stephen Marotta. "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."

The retailer expects to honor gift cards and store credit through March 11.
American retailer Payless ShoeSource files Chapter 11 bankruptcy with plans to close all of their U.S. stores.