Payless ShoeSource seeks bankruptcy protection again
INTERNATIONAL - US discount retailer Payless ShoeSource Inc on Monday filed for voluntary Chapter 11 bankruptcy protection for the second time, along with its North American subsidiaries, and said it would wind down all North American stores by the end of May.
The retailer will close about 2,500 stores in North America starting from the end of March and wind down its e-commerce operations.
Reuters had reported last week that the company was planning to close its stores when it files for bankruptcy for the second time in as many years.
“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,” Chief Restructuring Officer Stephen Marotta said.
Stores outside North America were not included in the Chapter 11 filing and will continue operations, the retailer added.
Payless said it intends to seek protection for its Canadian subsidiaries under the Companies’ Creditors Arrangement Act (CCAA) in the Ontario Superior Court of Justice.
The company exited bankruptcy in 2017 with about $400 million in loans, after slashing its debt pile from over $800 million, according to court papers.
The move makes 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. Toys “R” Us and The Bon-Ton Stores are among the retailers that shut their stores in liquidations in the last 12 months.
Payless 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.Reuters