February 20, 2019
Just two months ago, Payless ShoeSource—a privately owned chain of discount shoe stores—pranked fashion influencers when it invited them to try on footwear at what looked like a high-end retailer called “Palessi.”
And it worked! According to The Huffington Post, “Sure enough, [the] influencers appear to have been completely fooled, praising the … look and quality of shoes marked as high as $1,800, but which normally [would] retail for $20 to $40.”
When they revealed their gag, not only did they earn an ovation from the red-faced fashionistas, but they received publicity nationwide for the brand—enough, you would think, to draw in large numbers of customers also looking for “luxury footwear.”
Not so much. The debt-burdened chain already had filed for Chapter 11 bankruptcy protection in April 2017, closing hundreds of stores as part of its reorganization, The Huffington Post reported.
At that time, it had over 4,400 stores in more than 30 countries. It re-emerged from restructuring four months later with about 3,500 stores and about $435 million in debt eliminated.
Now, Payless has announced that it is heading back into bankruptcy—and that, this time, the company will close its remaining 2,500 U.S. and Canadian stores after completing going-out-of-business sales. In doing so, it will deprive 16,000 more workers of their jobs.
Payless simply had too much debt, too many stores, and too much corporate overhead when it emerged from the earlier bankruptcy, Stephen Marotta, who was designated in January as the company’s Chief Restructuring Officer to prepare for the bankruptcy, told Local10.com news in Miami on February 19..
The company will start shuttering its locations in March and should finish closing shop by May.
The company said in an email that the liquidation doesn’t affect its franchise operations or its Latin American stores, which remain open for business as usual. It lists 18,000 employees worldwide.
Research contact: @HuffingtonPost