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.

The June numbers of the US Labor Department were announced today for May unemployment rates. The unemployment rate was lower in May than a year earlier in 253 of the 372 metropolitan areas, higher in 86 areas, and unchanged in 33 areas, according to the U.S. Bureau of Labor Statistics. Twenty-seven areas had jobless rates of at least 10.0 percent, and 37 areas had rates of less than 5.0 percent. Two hundred seventy-seven metropolitan areas had over-the-year increases in nonfarm payroll employment, 86 had decreases, and 9 had no change.

While Wall Street experts were predicting the economy to add 165,000 jobs, the better than expected monthly number of 195,000 is in line with the average monthly gain of 182,000 over the prior 12 months. This giving rise to more speculations that the Feds will step back its stimulus to the economy and raise interest rates.

Along with job creation, the Fed is also watching unemployment levels that is given in a separate survey. This survey from the Department of Labor that tracks unemployment remained at 7.6 percent, unchanged from the previous month.

The unemployment survey goes on to say that Yuma, Ariz., and El Centro, Calif., had the highest unemployment rates in May, at 30.8 percent and 22.8 percent respectively, with seasonal agriculture coming to a close.

Bismarck, N.D., had the lowest unemployment rate, 2.4 percent. A total of 205 areas had May unemployment rates below the U.S. figure of 7.3 percent, 154 areas had rates above it, and 13 areas had rates equal to that of the
nation.

Yuma, Ariz., also had the largest over-the-year jobless rate increase (+2.1 percentage points). The next largest increase was in Danville, Ill. (+1.0 percentage point).

El Centro, Calif., had the largest over-the-year unemployment rate decrease in May (-5.4 percentage points), followed by Yuba City, Calif. (-3.8 points). Twenty-six other areas had rate declines of at least 2.0 percentage points, and an additional 58 areas had rate declines between 1.0 and 1.9 points.

The Labor Department also revised its total nonfarm payroll employment for previous months. April was revised from +149,000 to +199,000, and the change for May was revised from +175,000 to +195,000. With these revisions, employment gains in April and May combined were 70,000 higher than previously reported.

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High Sierra Theatres of Santa Fe, NM (Thomas Becker and Nick Sanchez, Partners) purchased the Desert Sky Cinema at 70 W   Duval Mine Road in Sahuarita, AZ for slightly under[mepr-show rules=”58038″]$1.4 million ($74 PSF). The 18,166 sq. ft. building with six-screens has all digital projectors and three 3-D theatres with a total 750 seating capacity.

Storyteller Theatres Corp. a wholly-owned subsidiary of Marwit Capital of Newport Beach, CA was the seller. Sanchez and Becker were both members of the Storyteller management team in New Mexico, Becker as Senior Vice-President and Sanchez as Director of Operations. Sanchez in this capacity was involved in the construction of the Sahuarita theatre in 2000. Both partners have extensive experience in the motion picture exhibition industry, with over 65 years combined experience.

Marwit Capital had been divesting of the Storyteller assets for several years and one day Sanchez and Becker decided to make inquiries on the Desert Sky Cinema for themselves. “It was their first choice,” according to Becker, “because Nick had helped build it, and because we both love the area and think one day of retiring there.” The local management and employees have all stayed on-board in the transition.

The purchase of Desert Sky Cinema is the first theatre in the company’s portfolio, as they continue to look for others in Arizona and the Southwest. High Sierra Theatres is an owner / operator / management company and plan to run the theater as much as possible as a community theater.

Becker explains, “In addition to the Hollywood box office films, we plan to bring back an ‘Encore Presentation of Metropolitan Opera’, and are working on a 42-week classic film festival to include Hitchcock, Welles and other classic films best viewed on the large screen. Although we haven’t reserved all the film names yet in the series, I can say, ‘Casablanca’ with Humphry Bogart and Ingrid Bergman will be in the lineup.”

The new owners encourage feedback from the community to bring as much alternative films as possible to the region and will also do private theater events with seating for 100 – 200 people. The theatre is also satellite equipped for additional special events.

Becker can be reached at (203) 943-1146 and Desert Sky Cinema should be contacted at (520) 393-1212.[/mepr-show]