Shutter Down For Payless ShoeSource; Files For Bankruptcy
Startup firm Payless ShoeSource has recently filed for bankruptcy as it is preparing to wind down the operation of its 2500 stores spread across United States. As per details of its bankruptcy filing, the firm has around $470 million in outstanding debt and though it tried to keep some stores open by selling off its real estate it was not able to find a suitable buyer. The retail chain had been founded in 1956 at Kansas and though all its stores will remain open till March end a few of them will be open till May while its e-commerce operations are also winding down.
This liquidation in United States will not affect its franchises in other parts of the world or in Latin America. The chain had filed for bankruptcy in April 2017 to close down its 700 stores and with $435 million debt but then after four months was able to get back to business. But other retailers like Toys R Us were unable to avoid financial collapse. Unfortunately Payless ShoeSource was forced to get back to bankruptcy court like Gymboree as the retail industry continues to face upheaval as shoppers are moving their requests online and e-retailers are going all out to woo them.
This kind of change in demand has benefitted giant retailers like Wal-Mart and Amazon or very small boutique stores but this has left mid-sized firms floundering as large retailers have the cash to invest in online platforms and other capabilities while local retailers can focus on fine-tuning their merchandise to suit demand of their local clients. Payless ShoeSource was one such unfortunate retailer which faced competition from T. J. Max’s parent firm TJX Companies which has a market capitalization of $62 billion and owns shoe retailer DSW. The debt of Payless ShoeSource was due to $2 billion sale of its former parent company Collective Brands that had been sold to Wolverine World Wide.