Published: Fri, February 22, 2019
Finance | By Loren Pratt

Payless to close 248 Canadian stores, saying its 'ill-equipped' for market

Payless to close 248 Canadian stores, saying its 'ill-equipped' for market

Payless said in court documents that many of its stores did not generate enough to cash to support the costs of sourcing, design and merchandising.

Documents show the brand employs about 2,400 workers in Canada and owns 248 stores in the country.

The move comes just after Payless filed for bankruptcy in the USA and after Ohio-based shoe brand DSW Inc. shut down its Town Shoes Ltd. brand and the 38 stores it had in the country, saying the "competitive landscape for mid-luxury, mall-based footwear has dramatically changed, comparable sales have deteriorated consistently and generated significant operating losses".

Payless was founded in 1956 in Topeka, Kansas.

"We have worked diligently with our suppliers and other partners to best position Payless for the future amidst significant structural, operational, and market challenges", said Stephen Marotta, the chief restructuring officer for Payless. As published by Reuters, Payless said it intends to seek protection for its Canadian subsidiaries under the Companies' Creditors Arrangement Act (CCAA) in the Ontario Superior Court of Justice.

In a news release, Payless said all of its North American stores will close by the end of May, E-Commerce operations have been wound down, but the Latin American stores and global franchise stores will remain open and continue business as usual.

The company is officially filing for bankruptcy.

While shutting down in North America, Payless will continue in Latin America, where access to online shopping is less widespread.

The previous day Payless ShoeSource had started the shutting down of its 2,500 USA stores. Payless Shoes is closing.

"Competitive pricing online is so much easier with lower overhead".

The liquidation will not impact its franchised or Latin American stores, where it is the region's largest specialty footwear retailer.

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