Payless Shoes has announced that it is filing for bankruptcy protection in the U.S. and Canada, and that it plans to close all of its stores in both countries.
The discount shoe retailer, which has more than 3,400 stores in 40 countries, is seeking protection from its creditors under Chapter 11 of the U.S. Bankruptcy Code, and the Canadian equivalent, the Companies' Creditors Arrangement Act.
The company has 248 store locations across Canada, about half of which are in Ontario. All in, the chain employs just over 2,400 people in Canada, and court documents suggest the Canadian stores collectively lost $12 million U.S. in 2018.
The stores "are insolvent and are unable to meet their liabilities as they become due," the company said in a written statement. The company added that 220 of the Canadian stores couldn't come up with rent for the current month of February.
Founded in Kansas in 1956, Payless Shoes grew to become one of the biggest shoe sellers in the world, selling more than 110 million pairs a year at its peak. But the chain has fallen on tough times, and already went through creditor protection as recently as 2017, a process that spared the Canadian locations at that time.
This time around, the company says it plans to liquidate all its stores in the U.S. and Canada as quickly as possible. Payless said it plans to ask for the court's permission to honour gift cards and store credit until March 11, 2019, and to continue to allow returns and exchanges of applicable non-final sale purchases until March 1, 2019.
Payless stores outside North America — including in the Middle East, India, Indonesia, Indochina, Philippines, Africa, Latin America and various parts of the Caribbean — will still go on, as they are largely profitable, the company said.
