Payless ShoeSource shutting 7 stores in Valley
HARLINGEN — Just two years after filing its first bankruptcy, Payless ShoeSource officials concede their turnaround strategy has failed and they will close their remaining 2,500 stores in North America.
Late Monday night, the discount shoe seller filed its second bankruptcy in two years.
Payless has shut down several of its Valley outlets since it first filed in 2017, including stores at Valle Vista mall, 1102 S. Expressway 83 and one at San Benito Plaza.
Its last Harlingen store, at 1210 S. 77 Sunshine Strip in the Laurel Heights Shopping Center, will close, along with four stores in Brownsville, one at the Rio Grande Premium Outlets in Mercedes and a single store in Weslaco.
Liquidation sales at these stores already have begun and company officials say would continue for a month or two until inventory is gone.
The liquidation doesn’t affect its franchise operations or its Latin American stores, which remain open for business as usual, according to company officials.
The company first filed for Chapter 11 bankruptcy in April 2017 and closed around 400 stores. Executives at Payless, based in Topeka, Kansas, cut and consolidated to reduce the company’s debt but it apparently failed to turn around the company which employs around 18,000 people.
The company, founded in 1956 on the premise of delivering discount shoes in a self-serve setting, was taken private in 2012 by Golden Gate Capital and Blum Capital Partners and succumbed to the serious debt problems incurred by that move.
The Wall Street Journal recently reported the Payless store closings could be the largest retail liquidation ever in terms of store count.
“ The challenges facing retailers today are well documented, and unfortunately, Payless emerged from its prior reorganization ill-equipped to survive in today’s retail environment,” said Stephen Marotta, Payless ShoeSource’s chief restructuring officer, to the Associated Press.
He also noted to the AP that the previous Chapter 11 proceedings left the company with too much debt and with too many stores.