Payless Shoes on brink of collapse
Payless Shoes (US) is on the brink of filing for Chapter 11 bankruptcy protection.
The beleaguered retailer is in talks with banks over restructuring debt in a plan which would see it shutter about 1000 of its US stores. It has 4400 stores globally.
The company reportedly believes its US$600 million debt burden is unsustainable in the current retail market.
Bloomberg, quoting unnamed sources inside the company, reports the retailer may consider filing for bankruptcy if it is unable to reach a deal with its creditors. That decision may be made within the next fortnight.
Payless has been hurt by declining mall footfalls in the US, with consumers spending less on apparel and more on experiences – and shopping more online, where rivals like Amazon are eroding market share.
The company is owned by private equity firms Golden Gate Capital and Blum Capital Partners who acquired the business in the break-up of Collective Brands in 2012.
Founded in Kansas in 1956, it operates in 30 countries and employs more than 25,000 people.