| CHICAGO, April 4
CHICAGO, April 4 Discount footwear retailer
Payless ShoeSource said it had filed for Chapter 11 protection
on Tuesday with a plan to restructure debt and immediately close
400 underperforming stores in the United States and Puerto Rico.
Privately owned Payless Inc joins a long list of
U.S. brick-and-mortar retailers to fall victim to declining mall
traffic in the midst of a rise of internet shopping and rapidly
changing consumer tastes.
"This is a difficult, but necessary, decision driven by the
continued challenges of the retail environment, which will only
intensify," Payless Chief Executive Officer W. Paul Jones said
in a statement.
The Topeka, Kansas-based company listed assets in the range
of $500 million to $1 billion and liabilities of $1 billion to
$10 billion in a filing with U.S. Bankruptcy Court in St. Louis.
Payless, with 4,400 stores in more than 30 countries, said
it had reached an agreement with two-thirds of its top lenders
to cut its debt by 50 percent.
Existing lenders have agreed to provide up to $385 million
in debtor-in-possession financing, allowing Payless to remain in
business and pay its bills throughout the Chapter 11 process.
The company said that an $80 million new term-loan financing
will allow it to emerge from Chapter 11 "well positioned for
future growth and profitability post-restructuring."
Following the store closures, Payless said it will
"aggressively manage" its remaining real estate lease portfolio,
while looking to invest in growth areas and expand in
international markets such as Latin America.
Large department store chains such as Macy's Inc,
Sears Holding Corp and J.C. Penney Company Inc
have been implementing turnaround plans that include
cost-cutting and hundreds of store closures across the United
Among online shoe retailers, Amazon.com Inc bought
Zappos.com in 2009 for nearly $1 billion in a push to expand in
the growing online apparel arena.
(Reporting by Tracy Rucinski; Editing by Lisa Shumaker)