Payless Shoe Source is closing their stores for good. The company has been operating for 63-years. On Monday, the company filed for Chapter 11 bankruptcy protection. The store began their going out of business sales this past Sunday at all of 2,500 US and Canadian outlets. Around 16,000 employees will no longer have a job. They will begin closing their stores in March and will conclude by the end of May.
Payless joins the ranks of retailers when it comes to filing for bankruptcy. RadioShack, American Apparel and Gymboree are just a few that have closed their doors down for good.
The reason for Payless Shoe Source closing was due to their high debt. Also, they have too many stores and too much corporate overhead. The company ran into a slew of problems such as carrying too much merchandise during their holiday season. Doing so caused them to cut their prices. Business in North America for their North America stores lost $63 million during 2018.
Payless Shoe Store Closing For Good In North America
According to sources for the company, they owe $1.3 million in severance payments to employees who were laid off before filing for bankruptcy. However, they are unsure if they will be able to make all of the payments. It is also not clear whether or not they will be able to pay severance to those who lost their job once the doors close for good.
420 stores in 20 other countries will remain open. With that being said, most of the stores will be open in Latin America as well as the US Virgin Islands, Saipan, and Guam. However, their core North American business will no longer be up and running.
There is some good news though for those losing their jobs at Payless. As of now, there are more job openings then there are candidates for positions. Retailers are having a rough time finding workers, so there’s hope.