Following its bankruptcy announcement in April, which was accompanied by news of store closures, Payless Shoesource is looking to shutter more doors.
The retailer, which was initially slated to close 400 stores, could now double that number, according to The Wall Street Journal. Payless is in negotiations with landlords over rent concessions for 408 locations. The company is seeking approval from a federal bankruptcy court to close 112 of those stores plus 296 more if the talks go south.
“We remain hopeful….negotiations will result in consensual modifications and rent concessions with respect to these additional stores and that many of the 296 will remain open,” a spokesperson told the publication.
Payless has been one of a steady stream of apparel and footwear bankruptcies in the last 12 month, a pace that has accelerated in 2017. BCBG, The Limited, Rue 21 and Wet Seal are among the other casualties threatening to leave malls either vacant or transformed.
(Read more about the retail fallout: Infographic: The Accelerating Pace of Apparel Retail Bankruptcies)
The shoe chain, which plans to emerge from bankruptcy in August, has worked out a deal allowing it to cut 40 percent of its $838 million of debt. In exchange, lenders will receive equity in the company and creditors will take on “significant recoveries,” according to the paper.
The legal wrangling continues, however, as the retailers’ creditors, suppliers and vendors dispute information they say Payless withheld from court documents. Questions have also come up regarding the role of private equity firms Golden Gate Capital and Blum Capital prior to the bankruptcy filing.
Since 1958, the Topeka, Kansas-based retailer has been the go-to for value footwear. The company had approximately 4,400 stores in more than 30 countries at the time of its filing.