Payless ShoeSource opened its first store in 1956. The company was the brainchild of a pair of cousins, Louis and Shaol Lee Pozez, who wanted to fill a gap in the retail market for affordable footwear. The concept focused on letting customers serve themselves (hence the massive shelves of the same shoes in different sizes). And it was a novel concept that has been quite successful for roughly 60 years.
Unfortunately, the company has been struggling to stay afloat for many years, and it now looks like the company can no longer continue treading water. At the end of last week, the company announced plans to shutter all 2,100 stores across the United States and Puerto Rico. And for some of these stores, liquidation has already begun.
Anyone who has any knowledge of the state of Payless, though, should not be surprised by this at all. After all, you may recall that the company filed for Chapter 11 bankruptcy back in 2017, which also resulted in restructuring and the closure of at least 400 locations. With that, reports say that the American discount footwear franchise is now set to close all commercial operations with a Chapter 7 bankruptcy filing to follow liquidation, probably the final week of February.
At the same time, anyone who has been paying any attention to the whole of the retail industry should be fully aware just how difficult it has been for all retailers. Well-known specialty shops like Gymboree and Charlotte Russe have been closing stores, but even stalwarts like Sears have had to face downsizing woes. And more and more people are finding the price and convenience and online shopping just a little too tempting to pass up.
UBS footwear analyst Jay Sole tries attempts to rationalize the move. He says, “Payless is trying to compete above Target but below DSW and to sell at that price point—and also keep quality high enough so people will want to buy it—is hard. It became too hard of a puzzle to solve. People are going other places. Today’s consumers cares about convenience. It’s easier to go online or to a one-stop shop like Walmart where you can get the other things you need. For shopping online, places like DSW have a better online presence.”