Payless ShoeSource plans to file for creditor protection in Canada and the U.S., and close all 2,500 of its North American stores this spring, and its e-commerce operations, according to the company.
That includes 31 Payless stores in B.C.
The company, which operates in 36 countries, said in a release that retail operations outside North America are a separate legal entity and are therefore not included in the closure. International stores include 420 stores in Latin America, the U.S. Virgin Islands, Guam
and Saipan; and 370 international franchisee stores across the Middle East, India, Indonesia, Indochina, Philippines and Africa.
Payless now seeks protection from creditors under Chapter 11 of the U.S. Bankruptcy Code, and Canada’s Companies' Creditors Arrangement Act.
“The company is seeking authorization from the U.S. Bankruptcy Court to continue to honor customer gift cards and store credit until March 11, 2019, and to continue to allow returns and exchanges of applicable non-final sale purchases made prior to February 17, 2019, until March 1, 2019,” it said in a release.
"A similar request will be made in the Canadian Court. Payless has discontinued its rewards programs and any outstanding merchandise coupons in North America, effective immediately.”
The retail shoe sector has been upended by the rise of online shopping and Amazon.com (Nasdaq:AMZN).
Even online shoe retailers, however, have found business a tough slog.
Vancouver’s Shoes.com shut down abruptly on January 27, 2017. A few weeks earlier, Walmart (NYSE:WMT) had shelled out US$70 million to buy Shoebuy.com – a move that many interpreted as a shot across the bow of Amazon.com, which then operated what was primarily a shoe e-commerce division known as Zappos.com. That division has since evolved to have a wide range of clothing as well as shoes.
Walmart then bought Shoes.com assets, such as its domain name.
As for Payless, its executives seemed in good humour late last year, when it staged a prank on social media influencers.
Payless invited dozens of influencers to a party that was ostensibly to celebrate a brand of shoes named Palessi, and designed by Italian designer Bruno Palessi.
The influencers were shown in YouTube videos saying how much they liked the shoes and that they were willing to pay $400 or $500 for a pair of shoes that would have retailed at Payless for about $30.