Earlier this month, we reported that things looked grim for Payless ShoeSource.
Inside sources hinted that the discount footwear retailer was making plans for its second trip to bankruptcy court and reportedly discussing plans to close a massive amount of stores. Now it seems as if those inside sources were right.
In a recent press release, Payless announced that it would be closing all of its Canadian stores.
Over the years, the company saw many ups and downs. In 2017, Payless ShoeSource filed for Chapter 11 bankruptcy. The company had plans to restructure all of its North American stores and two of its Hong Kong-based entities, while immediately shuttering 400 underperforming locations in the U.S. and Puerto Rico. With the help of lenders, Payless was able to exit bankruptcy, but not without shuttering stores and cutting jobs at its headquarters.
Despite the reorganization, Payless has been unable to keep up. The company cites “too much remaining debt, too large a store footprint and a yet-to-be realized systems and corporate overhead structure consolidation,” as the factors leading to its demise.
Payless will close 248 stores across Canada.
Retail Insider notes that about 2,400 workers will lose their jobs due to the closures. In addition, Payless is also closing all of its American stores and is also winding down its online operations.
While Payless Canada seeks creditor protection pursuant to the CCAA in the Ontario Superior Court of Justice, liquidation has already begun at some of the stores. As of right now, the retailer has discontinued its reward program and outstanding merchandise coupons. Store credits will be honoured until March 11, 2019, and returns and exchanges on products purchased before February 17, 2019 will be allowed until March 1, 2019.
While North American operations are coming to an end, Payless will continue to operate in Latin America — so, who knows? We might see them emerge as one of the retailers that make a comeback in Canada some day. Until then, stay tuned for a #SaleSpy.
Featured image: Square One
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