MANCHESTER, NH – Payless Shoes announced April 4, 2017 that it has filed two voluntary Chapter 11 petitions in U.S. Bankruptcy court. That means the shoe store chain will be closing nearly 400 of it’s 4,400 stores.
Updates about which stores will close is expected to be posted here tomorrow on the corporate website. There are more than two dozen Payless stores in New Hampshire, including two in Manchester – at the Mall of New Hampshire and on March Avenue.
The full statement issued is posted below.
Payless’ North American entities, as well as two foreign Hong Kong-based entities involved in logistics (CBL) and supply chain (DAL), filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Eastern District of Missouri to facilitate the financial and operational restructuring necessary to strengthen its balance sheet and position the Company for long-term success. Payless is also filing for recognition of the U.S. Chapter 11 proceedings under Part IV of the Companies’ Creditors Arrangement Act in the Ontario Superior Court of Justice.
Payless will continue to operate its business in the ordinary course in terms of its customers, vendors, partners and associates and, subject to Court approval, expects to continue:
Providing associate wages, healthcare coverage, and other benefits without interruption;
Honoring pre-petition obligations to customers, including all gift cards with Payless stores and Payless.com; and
Paying vendors and suppliers in the ordinary course for all authorized goods and services provided on or after the date of the Chapter 11 filing.
We intend to use the Chapter 11 process to implement a comprehensive path forward to meaningfully enhance our growth profile and profitability, positioning us to continue to thrive as a sustainable business in the face of the retail industry’s radical, unprecedented transformation.
Payless has the strong support of its senior lenders for a consensual restructuring through a Plan Support Agreement (PSA) to reduce debt, materially lower annual cash interest costs, access significant additional capital, and provide a clear path to emergence on an expedited basis. Payless has also negotiated agreements with certain of its existing lenders to provide the Company access of up to $385 million of Debtor-in-Possession financing.
Here you’ll find the most up-to-date information, including links to our claims agent site, restructuring information line (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), and frequently asked questions. Please check back for updates.
