It’s been five months since Payless ShoeSource announced its second bankruptcy, confirming the closures of all stores in the United States as well as the shuttering of its e-commerce platform.
Many similarly low-priced mass merchants have attempted to grab a piece of the family-footwear chain’s leftover market share, with Skechers becoming the latest brand to suggest its capturing displaced customers in the wake of Payless’ demise.
In its second-quarter earnings report, the Manhattan Beach, Calif.-based company noted substantial momentum in its international business, but also expects to flex its domestic arm ahead of the back-to-school and holiday seasons. Speaking with investors, COO David Weinberg addressed the 1.5% climb in sales within the U.S. — a result of the 8.6% increase in direct-to-consumer revenues, which the executive noted coincided with Payless’ liquidation sales.
“I don’t know if that is a direct cause-and-effect, and it would be difficult to push such a thing. But as we clean out retail — and we’ve been saying this for years — as some of the weaker links move away, those that are left [become] stronger and will pick up the slack and will continue to grow,” he explained.
Saddled with an excess of stores and hundreds of millions in debt, Payless was ultimately forced to liquidate all 2,500 of its brick-and-mortar outposts in the country. It joined the growing list of retailers that filed for Chapter 11 and subsequently shut down stores — including Bon-Ton, Gymboree and Sports Authority — amid digital disruption and shifting consumer preferences.
“It’s not limited to Payless,” said COO David Weinberg. “All the store closures should increase the business strength of those that are left behind. We certainly anticipate picking it up both in our third-party wholesale business and our direct-to-consumer business.”
Skechers’ total sales rose 10.9% to $1.26 billion — up from analysts’ predicted $1.22 billion — with profits soaring 66% to $75.2 million, or 49 cents per share, compared with the 34 cents predicted by market watchers. It sent the company’s shares soaring in after-hours trading, with its stock still in the green today. (As of 11:15 a.m. ET, Skechers was up 13% to $39.38.)
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