(Photo: Dominic Valente/USA Today Network)
Discount footwear chain Payless ShoeSource sought bankruptcy court protection Tuesday, announcing it will close 400 stores after facing bruising competition from online retailers and other setbacks.
Eleven of the stores set to close are located in Mississippi. (See the list at the bottom of this article)
The chain said that under a reorganization plan, it will shed debt, attract new capital, boost its e-commerce efforts and emerge stronger and more competitive.
OTHER NEWS: 5 Mississippi J.C. Penney stores to close
Coming amid a wave of other retail sector bankruptcies and hundreds of store closings, Payless filed a Chapter 11 reorganization petition in U.S. Bankruptcy Court in Missouri that said the company has as much as $1 billion in assets and up to $10 billion in liabilities, along with more than 100,000 creditors.
An announcement by the privately-held company said Payless would "optimize its store footprint, with the immediate closure of nearly 400 underperforming locations in the U.S. and Puerto Rico." The company currently operates about 4,400 stores in 30 countries, including the U.S.
Payless, like other traditional store-based retailers, has had its share of tough online competitors in like Amazon and shoe supplier Zappos.com, which cut costs by having fewer employees and lower real estate costs. Payless CEO Paul Jones said competition is sure to get rougher.
In addition, Payless said it has also faced some unique challenges over the past couple of years. They included several months of delays in receiving product deliveries during port tie ups on the West Coast, unspecified purchasing and inventory issues and not being able to invest enough in advertising and new technologies.
A strong U.S. dollar also cut into profit margins when it came to sales in Canada, Latin America and Australia. That’s because customers bought shoes with their local currencies that Payless had to obtain with American dollars.
Payless said it plans to seek modified terms for the balance of the real estate lease portfolio or evaluate the possibility of additional closures.
The Topeka-based company had been in talks for as many as 1,000 store closings before the bankruptcy filing, Bloomberg News reported in February.
Founded in 1956, Payless offered what was a new retailing experience at the time, enabling customers to self-select footwear with affordable prices. The company says it now is the largest specialty family footwear retailer in the Western Hemisphere.
Payless is the latest major retailer planning store closings this year. Similar announcements have come from Macy’s, JC Penney, the parent company of Sears and Kmart, and others.
Payless stores closing in Mississippi
• 981 Brookway Blvd., Brookhaven
• 832 S State St., Clarksdale
• 316 Highway 80 East Clinton
• 712 Bartur St., Hattiesburg
• 53 Lakewood Drive, Hattiesburg
• 6351 I-55 North No. 105, Jackson
• 2911 Terry Road, Jackson
• Edgewood Mall, Mccomb
• Bonita Lakes Mall, Meridian
• North Park Mall, Ridgeland
• Yazooville Shopping Center, Yazoo City
The Clarion-Ledger contributed to this report.