Payless Closing 7 Stores in Arizona Immediately

Courtesy photo Payless ShoeSoruce

CORRECTION TO THE EARLIER NUMBER OF STORE CLOSURES HAS BEEN MADE HERE – 7 TOTAL STORES IN ARIZONA

ARIZONA — Payless ShoeSource has become the most recent retailer to file for bankruptcy in the face of hard times. The discount shoe store filed for Chapter 11 bankruptcy protection on Tuesday, saying it needed to shore up its balance sheet in order to position itself for long-term survival in an increasingly tough retail landscape. “This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify,” said Payless’ CEO W. Paul Jones in a statement. Payless plans to immediately close 400 stores in the U.S. and Puerto Rico and will also “aggressively manage” the rest of its real estate portfolio. That will mean closing additional stores and seeking to modify existing lease terms. The retailer currently has 4,400 stores in more than 30 countries.

The list of immediate store closures was released Wednesday; there are 7 in Arizona on the list as follows:

  • 5122 N 95Th Ave Glendale AZ
  • 108 N Morley Ave Nogales AZ
  • Tuscano Towne Center Phoenix AZ
  • Metro Center Phoenix AZ
  • Foothills Center Phoenix AZ
  • Plaza Vista Mall Sierra Vista AZ
  • Menlo Park Sc Tucson AZ

To see the full list posted by Payless on April 5th, click here for store closures document.

In conjunction with the restructuring, Payless has entered into a Plan Support Agreement (PSA) with parties who hold or control approximately 2/3 of its first lien and second lien term debt to reduce its debt load by almost 50%, materially lower its annual cash interest costs, access significant additional capital and provide a path to an expedited emergence from Chapter 11 with a sustainable capital structure for the future. The PSA demonstrates the strong support of our senior lenders for a consensual restructuring and their conviction in the future of Payless, as well as providing a clear path to emergence on an expedited basis.

Under this agreed plan with its lenders, Payless intends to use the Chapter 11 process to accomplish specific objectives:

  • Strengthen its balance sheet and restructure Payless’ debt load;
  • Invest in specific areas that Payless believes will provide sustainable growth including omnichannel expansion; product and inventory initiatives; and international expansion in Latin America and elsewhere; and
  • Optimize its store footprint, with the immediate closure of nearly 400 underperforming locations in the U.S. and Puerto Rico and work to aggressively manage the remaining real estate lease portfolio either by modifying terms, or evaluating closures of additional locations.

Related to these activities, Payless has retained Kirkland & Ellis as its legal advisor, Guggenheim Securities as its investment banker and financial advisor and Alvarez & Marsal as its restructuring advisor.

Consumers will have full access through the Payless corporate website www.paylesscorporate.com to information about the location of stores at which they can shop if their current store is being closed, as well as information about going-out-of-business sales.

The Company has also established a call center for questions: 844-648-5574 if calling from within the U.S. or Canada, or +1 347-505-5254 if calling from outside the U.S. or Canada.