UPDATE: Payless Confirms Liquidation
In a statement to FN, a Payless spokesperson said: “Payless will begin liquidation sales at its U.S. and Puerto Rico stores on Feb. 17, 2019, and is winding down its e-commerce operations. We expect all stores to remain open until at least the end of March and the majority will remain open until May. This process does not affect the Company’s franchise operations or its Latin American stores, which remain open for business as usual.”
What We Reported Earlier
Another one bites the dust?
Payless ShoeSource is in talks to close all 2,300 of its U.S. stores amid bankruptcy proceedings that are expected to begin before the end of the month, according to a new report from Reuters citing sources familiar with the matter. The beleaguered chain — which emerged from bankruptcy in 2017 after just four months, having shuttered 400 stores and restructured its debt load — appears to be on track for a second round of Chapter 11 proceedings, but this time, per reports, it may be forced into liquidation.
Without finding a buyer, the Topeka, Kan.-based company will likely usher in yet another wave of retail vacancies at a challenging time for the industry: In 2018, companies announced plans to close a record 145 million square feet of retail space, according to data from research group CoStar, with malls in lower-trafficked areas feeling the brunt of the effects. Coresight Research also found that since Jan. 1, retailers have announced 2,187 new store closures, up 23 percent over the same period last year. (This is only partially offset by the 1,503 store openings they’ve announced so far.)
Watch on FN
While many mall owners are still reeling from the 2018 liquidations of Bon-Ton Stores and Toys R Us, Payless’ saving grace may be the relatively small size of each of its stores. Unlike Sears, which has shuttered hundreds of locations in recent years at an average size of more than 100,000 square feet, Payless’ individual store footprint is typically only 2,500 square feet, according to a brochure on the company’s website, so landlords won’t have to scramble to find gyms and coworking spaces to take their place.
According to Payless’ website, it has an additional 400 company-owned stores in Canada, plus more than 400 company-owned and joint-venture stores across Latin America and the Caribbean, and more than 300 franchise stores around the world. It’s unclear so far what will happen to its international businesses in the case of a U.S. liquidation.