Payless prepares for second bankruptcy
U.S. discount retailer Payless ShoeSource Inc is preparing for its second bankruptcy, after first filing in April 2017.
As part of the bankruptcy process, the shoe retailer is looking for buyers for its real estate, to avoid shuttering a significant portion of its North American stores, which could happen within weeks.
Payless had previously filed for bankruptcy in early 2017 and closed nearly 400 stores, but it exited bankruptcy with about $400 million in loans, down from over $800 million. The debt comes from a 2012 leveraged buyout by private equity firms Golden Gate Capital and Blum Capital Partners.
Earlier this year, Payless hired an adviser to help evaluate strategic alternatives, including a sale or restructuring, but it might not be enough to avoid a second bankruptcy.
Like many brick-and-mortar retailers, Payless has been beat by the popularity of online shopping and left to face heavy debt. Many brands like Sears and Charlotte Russe saw a similar fate in recent years including kids clothing store Gymboree, which recently filed for its second bankruptcy in less than two years.
Payless has made efforts however to bring new life to the brand. Back in November, it launched a large advertising campaign with the opening of a fake luxury store in Los Angeles. The stunt was meant to showcase how Payless shoes are more than capable of catching the eyes of the fashion-forward in an age of e-retailers and designer footwear hype.
The company currently operates over 2,700 stores across North America, as well as 900 abroad. It also has a workforce of more than 18,000 globally.
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