Payless to close 1,000 stores or file for BANKRUPTCY…
The closings keep piling up for retail. According to this Morning Call report, Payless is ready to close 1,000 stores or possibly file for bankruptcy.
Payless Inc. is in talks with its lenders over a restructuring plan that includes closing about 1,000 stores as it wrestles with an unsustainable debt load, according to people with knowledge of the matter.
There are 10 Payless ShoeSource stores in the Lehigh Valley, including at the Lehigh Valley, Whitehall and South Malls.
The discount shoe retailer may consider filing for bankruptcy if it’s unable to reach a deal with the creditors, said the people, who asked not to be identified because the information isn’t public. A decision on whether to restructure in or out of court may be reached as soon as this month, they said.
The chain has hired Guggenheim Partners to help in the effort, the people said.
Representatives for Payless and Guggenheim declined to comment.
Payless is the latest retailer to find its back against the wall because of declining mall traffic as more and more customers shift spending to experience from shoes and apparel. The retailer hired law firm Kirkland & Ellis to look at options for its $600 million debt load, people with knowledge of the matter said earlier.
Traditional chains are struggling because of the quickening shift to online shopping offered by competitors led by Amazon.com. Retailers such as J. Crew Group, Claire’s Stores, Gymboree, Rue21, and True Religion Apparel are identified as the most troubled companies on S&P Global’s list of retailers on negative outlook.