Payless ShoeSource is closing all of its 2,100 remaining stores in the U.S., joining a list of iconic names such as Toys R Us and Bon-Ton that have shut down in the last year.
The Topeka, Kan.-based chain said Friday that it will hold liquidation sales starting Sunday and wind down its e-commerce operations. All of the stores will remain open until at least the end of March, and the majority will remain open until May.
The debt-burdened chain filed for Chapter 11 bankruptcy protection in April 2017, closing hundreds of stores as part of its reorganization.
At the time, it had over 4,400 stores in more than 30 countries. It reemerged from restructuring four months later with about 3,500 stores and eliminated more than $435 million in debt.
The company said in an email that the liquidation doesn't affect its franchise operations or its Latin American stores, which remain open for business as usual. The company’s stores in Puerto Rico, however, will close. Payless lists 18,000 employees worldwide.
Shoppers are increasingly shifting their buying online or heading to discount stores such as T.J. Maxx to grab deals on name-brand shoes. That shift has hurt traditional retailers, even low-price outlets such as Payless. Heavy debt loads have also handcuffed retailers, leaving them less flexible to invest in their businesses.
But bankruptcies and store closures will continue through 2019, so there's “no light at the end of the tunnel,” according to a report by Coresight Research.
Before this announcement, there had been 2,187 U.S. store closing announcements this year, with Gymboree and Ascena Retail, the parent of Lane Bryant and other brands, accounting for more than half the total, according to the research firm. This year's total is up 23% from the 1,776 announcements a year ago. Year-to-date, retailers have announced 1,411 store openings, offsetting 65% of store closures, it said.