It looks like another major U.S. retailer is facing hard times in this ever-changing retail environment. Several reports have said that Payless ShoeSource is filing for Chapter 11 bankruptcy and announcing a restructuring plan.
The Washington Post reported that the restructuring plan includes closing 400 stores in the United States and Puerto Rico with further closures possible.
Payless CEO Paul Jones said in a statement: “This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify. We will build a stronger Payless for our customers, vendors and suppliers, associates, business partners and other stakeholders through this process.
While we have had to make many tough choices, we appreciate the substantial support we have received from our lenders, who share our belief that we have a unique opportunity to enable Payless — the iconic American footwear retailer with one of the best-recognized global brands — to remain the go-to shoe store for customers in America and around the globe.”
Jones continued, “We are confident that this process will also enable us to leverage Payless’s existing strengths to succeed. These strengths include our ability to produce significant free cash flow and, even last year, flat EBITDA despite unprecedented challenges and in contrast to many retailers; our portfolio of strong proprietary brands, along with unique licensing agreements with premier brands and partners; our best-in-class design and sourcing capabilities that enable the Company to offer customers high quality products at a significant discount to peers; our strong and growing Latin American business, and a lean and scalable franchise model for other markets.”
Payless ShoeSource joins several other major retailers that have filed for bankruptcy, including Gander Mountain, Radio Shack, Eastern Mountain Sports, Aeropostale, among others.