Payless ShoeSource, one of the largest specialty family footwear retailers in the country, is the latest retail chain to seek protection from its creditors while it reorganizes in federal bankruptcy court.
The company, based in Topeka, Kan., said Tuesday it will immediately close nearly 400 poorly performing stores nationwide. It hopes to modify leases for some other stores or evaluate them for closure.
At least one among the dozens of Payless locations in Northeast Ohio is among the stores being shuttered.
Employees at one Payless store said the location at 1198 S. Arlington St. has closed. An attempt to reach the store by phone Tuesday was unsuccessful.
A Payless employee at the Chapel Hill Mall location in Akron said that store was not among those affected by the closings. An employee at the Summit Mall store in Fairlawn said that location will remain open as well.
A message at the Payless corporate website www.paylesscorporate.com says customers can check the site after 11 a.m. EDT Wednesday for a list of stores closing, as well as information about going-out-of-business sales. The company also has established a hotline for questions about the restructuring at 844-648-5574.
Payless has more than 4,400 stores in more than 30 countries and was founded in 1956.
Payless plans to reduce its debt by almost 50 percent, lower how much it pays in interest and line up funds. The company says some of its lenders have agreed to make available up to $385 million to keep the stores running.
“This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify,” said Payless CEO Paul Jones in a news release.
Shoppers are increasingly shifting their buying online or going to discount stores like T.J. Maxx to grab deals on designer brands. That shift has hurt traditional retailers, even low-price outlets like Payless.
In fact, Moody’s Investor Service said earlier this year that the number of “distressed” retailers —those with cash problems and lots of debt that are facing strong competition — is at the highest rate since 2009. It named Payless as one of the retailers.