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Payless Shoe Source has officially filed bankruptcy and plans to close 400 stores due to slumping sales and fierce e-commerce competition.
It was leaked more than a week ago by people familiar with the matter that the discount retailer was filing for Chapter 11 protection with plans to close about 10% of its 4,000 stores. As part of its reorganization plan, the footwear chain plans to attract new capital, unload debt and boost its e-commerce business to become more competitive, USA Today reports.
News of Payless’ bankruptcy came as a surprise considering the strength of the discount retail segment. On a national scale, discount retailers surpassed traditional retailers in sales per SF last year, JLL reports, with chains like T.J. Maxx and Marshalls averaging sales of about $304/SF as of October, while traditional department stores like Macy’s pulled in $158/SF in sales.
