Bye Bye Payless
Payless ShoeSource - a place often flocked to during back to school shopping season where you could find affordable and stylish footwear - is closing all 2,100 stores across the United States. This isn’t the first time Payless files for bankruptcy as they did so in 2017 as well - but this year they stated they have $470 million in outstanding debt and have subsequently decided to pull the plug on their U.S. stores. When they filed for bankruptcy in 2017 they closed 700 stores but recently disclosed that the last bankruptcy filing didn't help much which is why, two years later, they are left with one option: to close all stores. Payless CFO Stephen Marotta attests their dip in success in recent years to online options like Amazon who are offering low prices without having to leave home.
Customers who value and enjoy the in-store experience of try before you buy will ultimately be the ones suffering from the country-wide closing of Payless stores. However, the stores currently residing in Latin America and the Middle East as well as their franchise operations will remain in tact. Founded in 1956, Payless was one of the largest show retailers in the U.S. but news of their recent bankruptcy filing will leave only 420 stores open in Latin America and 370 stores in the Middle East.
In the U.S., Payless plans to start closing doors at the end of March and likely run up until the end of May. As of now they have started rolling out their closing sales with most stores reporting anywhere from a 20-40% off discount working to compete with online stores as well as other bargain options like Walmart, Kmart, and Forever 21. Payless has stopped accepting orders through their online store as well, a website that many complained was outdated and hard to navigate.
Aside from the fact that yet another bargain store is being forced to call it quits in this age of online shopping and brand competition it will also cost around 16,000 employees their jobs. With the unemployment rate floating around a 4.0% in the U.S., losing thousands of these retail jobs is not ideal. Payless is not alone in this eventual fate as they share the same story as American Apparel, Gymboree, and Radioshack which have all closed their U.S. doors in recent years. The debt they stacked up, their high number of stores and the weight of managing so much corporate overhead has led to the eventual downfall of Payless. For now, customers have a few months to enjoy the discounted prices while they work on closing their stores for good after a 63 year run as one of Americas most iconic bargain footwear stores.