Footwear retailer Payless ShoeSource Inc. began layoffs at its Topeka headquarters Thursday as its president resigned amid disappointing sales results.

The company’s shares plummeted after it announced Duane Cantrell was stepping down as president immediately and August sales were down nearly 7 percent.

Cantrell, with the company since 1978, had been president since 2002.

The company said same-store sales, a closely watched retail figure, dropped 6.9 percent in the four weeks ended Aug. 28, sharply lower than analysts’ average forecast of a decline of 0.5 percent.

The retailer, with 5,078 stores in the United States and overseas, said Steven Douglass, Payless’ chief executive, would assume the responsibilities of president on an interim basis.

A news release issued Thursday morning did not detail how many jobs would be cut. But reports later put the number at 100 at the company’s Topeka operations, which had employed about 1,800 people. It was expected the company would either cut or leave unfilled about 200 positions companywide.

The restructuring is expected to save the company $12 million a year. A spokesman for the company did not return phone calls seeking comment.

The company said the departure of Cantrell, who was in charge of Payless’ merchandising strategy, was part of the company’s previously announced restructuring plan, although Cantrell was not mentioned in that announcement.

Credit agency Standard & Poor’s Ratings Services downgraded Payless’ credit rating, citing weak operating trends and inconsistent sales performance. It was lowered to “BB-” from “BB” with negative outlook.

“The ratings reflect Payless’ participation in the highly competitive footwear retailing industry, inconsistent sales performance, and thin credit protection measures,” said Standard & Poor’s credit analyst Ana Lai.

Payless also faces increased competitive pressures, particularly from mass merchants such as Wal-Mart Stores Inc. and Target Corp., which have been expanding their store bases at a faster pace and gaining market share from Payless, Standard & Poor’s said.

Payless said it still expected gross margin to rise 30 percent in fiscal 2004.

“However, to accomplish this objective, the company must achieve low-single-digit positive same-store sales on a consistent basis for the remainder of the year,” Douglas said in a prepared statement. “If the negative sales trend from July and August continues, it will be difficult to attain our fiscal 2004 gross margin.”

In August, Payless announced plans to close 260 stores to boost profit and net margins more quickly, as well as to reduce its wholesale businesses, which provides no growth opportunity. It also said it was to exit all 32 Payless stores in Peru and Chile.

Late in July, Payless said it would sell or close its 181 Parade footwear and accessories stores.

Payless shares closed down 96 cents, or 8.14 percent, at $10.83 on the New York Stock Exchange. The stock has lost about 36 percent from a high of $16.80 in May, and is trading near its two-year low of $10.58.