This week, Payless ShoeSource filed for Chapter 11 bankruptcy. The company announced that it will immediately close around 400 underperforming stores in the United States and Puerto Rico. The list of the stores being closed could be found on the company’s website.
In addition, the company has reached an agreement with parties that own around two-thirds of its first lien and second lien debt, which could help Payless reduce its debt by around 50%.
“This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify,” W. Paul Jones, the Payless CEO, said in a statement.
“Retailers have also suffered from the ebb and flow of brand popularity,” Fitch said. “Negative comparable-store sales and fixed-cost deleverage have led to negative cash flow, tight liquidity and unsustainable capital structures.”
Currently, the company owns over 4,400 stores in more than 30 countries.
Payless ShoeSource was not the only brands that have issues. On Tuesday, Ralph Lauren announced to shut down its flagship store on Fifth Avenue. RadioShack fired for its second bankruptcy in two years last month. In addition, Macy’s and Staples also announced plans to shut down stores this year.