Payless Shoesource Completes Chapter 11 Bankruptcy Plan
It used to be the case that people in New York and nationwide flocked to Payless Shoesource stores to purchase affordable footwear. But, the company fell on hard financial times, and had to file for Chapter 11 bankruptcy. Shoppers may be pleased to hear, however, that the company has recently emerged from the protection of the bankruptcy court after around 4.5 months, and has continued its business. Through bankruptcy, although the company had to close around 673 brick-and-mortar stores, it was able to pay over $435 million in debt. This debt represented around 50 percent of that the company estimated it had when it filed for bankruptcy.
The private-equity company is one of 14 businesses that filed for bankruptcy since January 2016 to succeed in finishing the bankruptcy restructuring process. The company’s chief executive officer will step down, and an executive committee is in place to appoint a new CEO.
While the company still has around 3,500 brick-and-mortar stores worldwide, it also has an online store. That being said, from late 2016 to early 2017, the company closed an additional 227 stores. However, these closures were performed within the company’s normal business activities. In the end, between filing for bankruptcy and the company’s ongoing business operations, around 900 stores were closed.
The company issued a statement stating that its bankruptcy goals were met and that it is set up for long-term success. It serves as a reminder that companies filing for bankruptcy can still reorganize their debts in a way that allows them to keep their doors open so they can have a brighter financial future.
Source: USA Today, “Payless emerges from bankruptcy court protection after closing more than 673 stores,” Kevin McCoy, Aug. 10, 2017