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Payless ShoeSource Emerging From Bankruptcy


Retail chain Payless ShoeSource is set to emerge from bankruptcy as soon as Wednesday, Reuters reported.

The company reportedly is banking on a strategy focused primarily on bricks-and-mortar sales at a time when retailers are closing stores as sales are being hit by growing e-commerce competition.

It was in April that Payless filed for Chapter 11 bankruptcy, a move that allowed it to get rid of debt and reorganize operations.

Payless has disposed half of its $847 million of debt. Following the emergence from bankruptcy, Payless reportedly will have a relatively clean balance sheet. It will also have better terms on leases and vendor contracts worldwide.

With the new move, the company is seeking to position itself to compete in a tight U.S. market, open more stores across Latin America and develop new franchises in Asia.

Reuters reported that it is yet to get information on whether Payless' chief executive, Paul Jones, will stay on board to lead the turnaround effort.

Meanwhile, cjonline.com reported that Jones told employees that he has resigned his position, even as the firm is poised to exit bankruptcy this week.

In bankruptcy, Payless has closed roughly 700 mostly mall-based U.S. stores. But the company reportedly is opening four mega stores here to add to some 3,200 post-bankruptcy locations in the U.S. and abroad.

The company plans to invest $234 million over five years, including on systems that will adjust inventory quickly in response to customer demand, Reuters reported, citing court filings and interviews with company representatives.

As per court papers, Payless' core loyal customers are budget-conscious mothers, who still visit stores to find a perfect fit for under $30 during four key selling seasons, including Easter dress shoes, summer sandals, back-to-school, and winter boots.

Earlier, the company's decreasing revenues were attributed to inventory overpurchases, failure to keep up with necessary technology changes to be competitive online and other issues.

by RTTNews Staff Writer

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