Payless Mulling Over Store Closures, Bankruptcy

Payless ShoeSource Inc., which sells shoes in community retail centers throughout the United States, is in talks with lenders over a restructuring plan that could involving shuttering approximately 1,000 stores. If unable to reach a deal with its creditors, the shoe retailer could end up in bankruptcy court.

The company has laid off 165 of its employees (2% of its total associate base). Additionally, several of Payless’ major vendor partners indicated that the retailer had fallen behind on payments. Payless is struggling with competitors, such as off-price retailers like DSW Inc. and TJX Cos. Inc., which has taken significant share from the company.

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