Payless files for bankruptcy, closing North American stores including Lawrence location
photo by: Associated Press
NEW YORK — Payless ShoeSource has filed for Chapter 11 bankruptcy protection and is shuttering its remaining stores in North America.
The filing on Monday came a day after the shoe chain began holding going-out-of-business sales at its North American stores.
The company, based in Topeka, Kansas, updated the number of stores it is closing to 2,500, up from the 2,100 it cited on Friday when it confirmed it was planning to liquidate its business. It reiterated that stores will remain open until at least the end of March and the majority will remain open until May.
The liquidation doesn’t affect its franchise operations or its Latin American stores, which remain open for business as usual, it said. According to a list provided to CNBC, there are 20 stores in Kansas that will close. That includes Payless’ Lawrence location at 1540 Wakarusa Drive, plus two in Topeka and one in Olathe.
The shoe retailer continues to list Topeka as its corporate headquarters, but many employees in the Topeka corporate office were transferred to Dallas, Texas after the company reorganized in 2017. The company was founded in 1956 in Topeka, and for years its East Topeka headquarters was a major employer in the region. The Topeka Capital-Journal reported that in August 2017, the company had 800 employees at its Topeka headquarters. But since then, Payless has moved most of its departments to Dallas, including buying, merchandising, marketing, legal, real estate, and portions of several other departments. The Capital-Journal said it was unclear how many employees the company still has in Topeka.
The debt-burdened chain filed for Chapter 11 bankruptcy protection a first time in April 2017, closing hundreds of stores as part of its reorganization.
“The challenges facing retailers today are well documented, and unfortunately, Payless emerged from its prior reorganization ill-equipped to survive in today’s retail environment,” said Stephen Marotta, Payless ShoeSource’s chief restructuring officer.
He noted that the prior Chapter 11 proceedings left the company with too much debt and with too many stores.