Payless Canada to shutter close to 250 stores

Just days after filing for bankruptcy in the U.S., Payless ShoeSource said on Tuesday that it will soon file for creditor protection in Canada.

The move commences liquidation sales at 248 locations across the country, which will then shutter. The Canadian Subsidiary, Payless Canada, will be seeking creditor protection pursuant to the CCAA in the Ontario Superior Court of Justice.

"We have worked diligently with our suppliers and other partners to best position Payless for the future amidst significant structural, operational, and market challenges. Despite these efforts, we now must wind down our North American retail operations under Chapter 11 and the CCAA,” said Stephen Marotta, appointed in January 2019 to serve as chief restructuring officer of Payless.

“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. The prior proceedings left the company with too much remaining debt, too large a store footprint and a yet-to-be realized systems and corporate overhead structure consolidation.”

The Kansas-based discount footwear retailer was founded in 1956 and operates stores in 36 countries worldwide including approximately 2,500 store locations in North America, as well as its e-commerce operations.

The company expects that Payless store closings will begin at the end of March and many stores will remain open through the end of May.

Most recently, DSW Inc. equally exited the Town Shoes banner in Canada, which operated 38 locations.

Documents filed with the Ontario Superior Court show that the company failed to pay rent for 220 Canadian stores this month and reported an operating loss of more than $12-million last year.

Payless Canada to shutter close to 250 stores

See also