Shoe retailer Payless to explore options, including sale: sources

(Reuters) - U.S. discount retailer Payless ShoeSource Inc has hired an adviser to help evaluate strategic alternatives, including a sale or restructuring, less than 18 months after it emerged from bankruptcy, people familiar with the matter said on Tuesday.

The action underscores the efforts Payless is making to avoid a second bankruptcy, as the popularity of online shopping on websites such as Amazon.com Inc <AMZN.O> continues to challenge the viability of many brick-and-mortar retailers.

Payless has hired investment bank PJ Solomon, the sources said. The chain, a fixture in malls and strip malls known for its shoes costing less than $30, is also considering shuttering at least one-third of its approximately 3,000 stores, one of the sources added.

The retailer may also consider filing for bankruptcy, the sources said, cautioning that no decisions on the company's future have been made. Payless exited bankruptcy in 2017 with about $400 million in loans, after slashing its debt pile from over $800 million, according to court papers. 

RELATED: Every retailer that filed for bankruptcy in 2018:

17 PHOTOS
Every retailer who filed for bankruptcy in 2018
See Gallery
Every retailer who filed for bankruptcy in 2018

A'gaci

Women's apparel and accessories retailer A'Gaci filed for Chapter 11 bankruptcy in January. 

Photo credit: Getty

Kiko USA

Cosmetics retailer Kiko USA Inc filed for Chapter 11 bankruptcy protection in January.

Photo credit: Getty

Tops Markets

Tops Markets operates 174 supermarkets — called Tops Friendly Markets. The company filed for bankruptcy protection in February.

Photo credit: Getty

The Bon-Ton Stores

The Bon-Ton Stores owns multiple department store chains including Bon-Ton, Bergner's, Boston Store, Carson's, Elder-Beerman, Herberger's, and Younkers. The company filed for bankruptcy in February.

Photo credit: Getty

Remington Outdoor

Remington filed for Chapter 11 bankruptcy protection in March.

Photo credit: Getty

The Walking Company

The shoe seller The Walking Company, which operates 208 stores in the US, filed for Chapter 11 bankruptcy protection in March.

Photo credit: Getty

Claire's

The jewelry chain Claire's filed for bankruptcy in March.

Photo credit: Getty

Southeastern Grocers

Southeastern Grocers, the parent company of the grocery chains Winn-Dixie, Harveys and Bi-Lo, filed for Chapter 11 bankruptcy protection in March.

Photo credit: AOL

Nine West

Nine West Holdings filed for bankruptcy in April.

Photo credit: Getty

Bertucci's

Italian casual-dining chain Bertucci's filed for Chapter 11 bankruptcy protection in April.

Photo credit: AOL

Rockport

The footwear brand filed for Chapter 11 bankruptcy protection in May.

Photo credit: Getty

National Stores

The owner of the Fallas chain of discount stores filed for bankruptcy in August.

Photo credit: Facebook

Brookstone

Brookstone filed for Chapter 11 bankruptcy protection in August.

Photo credit: Getty

Samuels Jewelers

Samuels Jewelers filed for Chapter 11 with an agreement for bankruptcy financing in August.

Photo credit: Facebook

Toys R Us

Toys R Us filed for bankruptcy in September.

Photo credit: Getty

Mattress Firm

Mattress Firm filed for bankruptcy in October.

Photo credit: PA

Sears

Sears filed for bankruptcy in October.

Photo credit: PA

HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

 

The sources asked not to be identified because the deliberations are confidential. Representatives for Payless and PJ Solomon did not respond to a request for comment.

Payless is not the first retailer to face bankruptcy for the second time in almost as many years. Reuters reported late last year that kids clothing store Gymboree Group Inc was also considering filing bankruptcy again, one year after exiting court protection from creditors.

Payless bucked a trend because it managed to successfully emerge from its 2017 bankruptcy, while many others had to liquidate. As part of the bankruptcy, a group of creditors, including hedge fund Alden Global Capital LLC, took over ownership, according to bankruptcy court records.

The chain exited bankruptcy with a plan to focus mainly on bricks-and-mortar sales, with an emphasis on Latin America and Asia, Reuters reported at the time.

It aimed to open four mega stores in the United States and invest $234 million over five years in systems improving its management of inventory, Reuters reported.

(Reporting by Jessica DiNapoli and Mike Spector in New York)

Read Full Story