The Topeka, Kansas-based retailer Payless ShoeSource has announced that they’ve filed for Chapter 11 bankruptcy protection.
On Tuesday the national shoe chain said, as part of their reorganization, they will be closing nearly 400 stores immediately, including 24 in Southern California. Payless was founded in 1956 and has over 4,400 stores in more than 30 countries.
CBS Los Angeles reports that Payless’ plan is to reduce almost 50 percent of its debt. According to the company, up to $385 million has been made available by some of its lenders to keep the stores running.
Payless CEO Paul Jones in a statement, “This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify.”
A shift in the way consumers shop has hurt traditional retailers, with the ease of buying online and at big discount stores like T.J. Maxx, people are grabbing designer brands with big discounts at other places.
Earlier this year Moody’s Investor Service said that the number of “distressed” retailers are facing strong competition, in fact it’s at the highest rate since 2009. Payless has been named as one of those retailers.
In 2017 there have been several retailers that have closed stores or gone out of business. Earlier this year, The Limited closed all 250 of its remaining stores. At the end of 2000, it had operated nearly 400 stores. In January, popular teen retailer Wet Seal said it would close its 171 stores.