Payless Emerges From Bankruptcy

Payless is Back

Payless ShoeSource is set to emerge from bankruptcy as soon as Wednesday. It is one of the largest retail chains to do so, and is banking on a strategy focused primarily on bricks and mortar sales. This at a time when e-commerce is casting an ever-growing footprint on retail sales. After disposing of half of $847 million of debt it had built up on its private equity ownership, Payless’ emergence essentially gives the company a do-over.

Now that it has cleaned up its balance sheet, Payless wants to position itself in a tight US market, open more stores across Latin America and develop new franchises in Asia. Latin America is a major part of its growth strategy, as its popularity will hopefully provide extra money from sales to allow for some room for error elsewhere. This has been a record year for store closings and bankruptcy announcements in the retail market.

After closing 700 U.S. stores when it filed for bankruptcy, Payless plans on opening 3,200 locations in the U.S. and abroad. It plans on investing $234 million over the next five years and to implement systems that will improve its competitiveness on line. Payless targets budget conscious customers, especially parents needing to buy Easter shoes, summer sandals, back-to-school shoes and winter boots for under $30. Payless is in competition with Walmart, Target and Kohl’s, which all also offer shoes for under $30.

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7 years ago