Thursday 24 September, 2020

Sources say Payless ShoeSource is set to shutter its US stores

American discount footwear retailer Payless ShoeSource Inc plans to close all of its 2,300 stores after it files for bankruptcy later this month, according to sources familiar with the matter. 

The sources spoke on the condition of anonymity since the liquidation preparations are confidential. 

This 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. Toys “R” Us and Sears are among the retailers that shut their stores in liquidations in the last year.

Payless had been trying unsuccessfully to find a buyer. When they couldn't find one, the company decided to start plans to liquidate. 

However, there is still a small chance a buyer could still show interest even after Payless files for bankruptcy, according to sources. Meanwhile, Payless will soon run going-out-of-business sales at its shops next week. 

Payless has not made a public statement.  

This is the second time the company has to file for bankruptcy. It previously filed in 2017 and exited 18 months ago, with about US$400 million in loans, after slashing its debt pile from over US$800 million, according to court papers. A group of creditors, including hedge fund Alden Global Capital LLC, took over ownership, according to bankruptcy court records.

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