Bad news for Payless ShoeSource fans: The company announced they were had filed for bankruptcy and were planning on closing 400 stores in the states and in Puerto Rico immediately.
The shoe chain filed for Chapter 11 protection, "on less than $1 billion in assets and $10 billion in liabilities," Business Insider reported.
This news comes after more than a month of negotiations with lenders and reports that the initial plans indicated Payless was willing to shutter over 1,000 stores, one-quarter of their locations, in order to restructure.
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The worst part: After all is said and done, it's likely that more than just those 400 stores will be closed. Payless said they would be "evaluating closures of additional locations." Our hearts go out to all employees who will be affected by these store closings. So sad!
Paul Jones, Chief Executive Officer at Payless, had this to say: "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."
Founded in 1956 in Topeka, Kansas, the chain now employs almost 22,000 people at 440 stores globally. Over the years, the brand has become, in Jones's own words, "the iconic American footwear retailer with one of the best-recognized global brands," and, "the go-to shoe store for customers in America and around the globe.”
This bankruptcy comes on the heels of other brick-and-mortar chain stores closing, too. Kmart and Sears are closing down many of their stores, as well, announcing at the beginning of the year that they would shut down 150 stores by spring. Online shopping and shifting business models have forced companies to make hard decisions like this, and many groups are considering closing all locations to focus on their online presence.