Payless ShoeSource announced today that it has re-emerged from bankruptcy.
The footwear retailer filed for bankruptcy in March and subsequently closed hundreds of doors.
Payless’ re-emergence gives the company a second chance after getting rid of $435 million in debt, about half of its pre-bankruptcy total.
With the restructuring efforts drawing to a close, CEO Paul Jones is set to retire. The company has established an Executive Committee which will lead the organization.
“In a year where so many major retail companies have filed for Chapter 11 restructurings, Payless is the first to successfully emerge as a stronger and healthier enterprise for the benefit of its customers, employees, suppliers, business partners, and lenders,” Jones said in the company’s press release.
The retailer didn’t provide details on it’s plans but a report in Reuters said it’s focused on brick-and-mortar despite the industry’s turn to e-commerce.
Payless currently has about 3,500 locations, down from 4,400. The company plans to open four mega stores in the United States. The report said it will also add 22 stores in Latin America, which contributes 40 percent of the company’s overall earnings despite only making up less than 10 percent of its store base. A Payless spokeswoman told Reuters that the company plans to add 22 locations across Peru, the Dominican Republic, Coasta Rica, Honduras and Nicaragua this year, with more to come next year.
The company also plans to invest around $230 million over five years on e-commerce and technology that will help it respond to consumer demand more quickly.
Coming back from bankruptcy gives the company a somewhat renewed balance sheet and puts Payless in better graces with vendor contracts across the globe.
The real question lies in whether brick and mortar is the best route and if Payless can compete with the onslaught of competitors from every angle.
“There aren’t that many other specialty shoe stores, but there are dozens of other retail chains that sell shoes, and they have taken much of that business a little at a time,” John Yozzo, managing director of FTI Consulting, told Reuters.
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