Payless Seeks Permission to Shutter 408 Additional Stores

Bankrupt Payless Holdings LLC is asking a St. Louis Bankruptcy Court for permission to shutter another 408 stores. The footwear retailer, along with 28 affiliated debtors, filed its Chapter 11 petition for bankruptcy court protection on April 4. On May 17, it received the court’s nod to shutter the 389 stores it had planned to close when it filed its voluntary petition. Since then, the company said in court papers that it not only recognized the need to remodel its brick-and-mortar business to align it with worsening retail-industry conditions, it also analyzed whether it needed to close any additional stores to align with its broader financial and operational restructuring. The company, excluding the 389 stores set for closure, still has 3,000 unexpired leases in North America. In the macro picture, Payless has 4,000-plus stores across more than 30 countries. Among the criteria for whether a store should be closed, the company considered profitability on an earnings before interest, taxes, depreciation, amortization and restructuring basis; opportunity for rent concessions from landlords; cash flow, and ability to transfer sales to nearby locations. Payless said in the court document filed last week that it could close fewer stores if ongoing negotiations with landlords result in consensual modifications

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