According to a report from Reuters, citing people familiar with the matter, the affordable footwear retailer hired investment firm PJ Solomon as it continues to struggle amid digital disruption and seeks to avoid another bankruptcy. Payless is reportedly considering a restructuring or a sale, along with closing the doors of at least a third of its approximately 3,000 stores across the country.
The Topeka, Kan.-based company also hasn’t ruled out filing for bankruptcy a second time, the report noted. Just four months after it filed, Payless managed to emerge from Chapter 11 in August 2017 and was taken over by a group of creditors including hedge fund Alden Global Capital LLC. It had closed about 900 stores and shed $435 million in debt, fine-tuning its post-bankruptcy business plan with a new pricing strategy and a renewed focus on the growing yet underserved Hispanic market.
“In a year where so many major retail companies have filed for Chapter 11 restructurings, Payless is the first to successfully emerge as a stronger and healthier enterprise for the benefit of its customers, employees, suppliers, business partners and lenders,” said Paul Jones in 2017, who retired from his post as CEO following the completion of the company’s restructuring.
Over the past few years, a number of struggling retailers including Sports Authority, Toys R Us and Bon-Ton were unable to successfully reorganize their businesses. U.S. bankruptcy code requires that a company filing for Chapter 11 protection hammer out a deal that addresses its real estate leases within seven months or allow its landlords to walk away.
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