KING CITY — Payless ShoeSource will close all 2,500 of its North American stores, including the King City location, in the coming months after the company filed for bankruptcy protection this week.
The discount shoe retailer began liquidation sales Feb. 17 at its U.S. locations and has wound down its e-commerce operations. According to a Payless spokesperson, the company expects all stores to remain open through March, with the majority closing by the end of May.
The liquidation will not impact the company’s franchised or Latin American stores, the spokesperson said.
Payless ShoeSource, founded in 1956 in Topeka, Kansas, has more than 3,500 stores in 40 countries worldwide and nearly 18,000 employees. Locally, the retailer has operated in King City for the past 28 years and was one of the first businesses to open at the King City Shopping Center off Canal Street in 1991.
This is the second time the company has filed for Chapter 11 bankruptcy. Payless previously filed in 2017 and shuttered nearly 700 stores during that process.
“The challenges facing retailers today are well documented, and unfortunately Payless emerged from its prior reorganization ill-equipped to survive in today’s retail environment,” said Stephen Marotta, chief restructuring officer of Payless, in a news release. “The prior proceedings left the company with too much remaining debt, too large a store footprint and a yet-to-be realized systems and corporate overhead structure consolidation. As a consequence, despite our substantial efforts, we were ultimately unable to operate the North American retail and e-commerce operations on a sustainable basis.”
Gift cards and store credit will be honored until March 11, and the company will allow returns and exchanges of applicable non-final sale purchases made prior to Feb. 17 until March 1. Its rewards programs and any outstanding merchandise coupons have been discontinued.