Payless ShoeSource

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Payless ShoeSource
Private
IndustryShoes, socks, accessories
FateU.S. and Canadian stores liquidated due to Chapter 11 bankruptcy
Founded1956; 63 years ago (1956)
FoundersLouis Pozez
Shaol Pozez
HeadquartersDallas, Texas, U.S.
Number of locations
3,600 (40 countries) (2018)[1]
Area served
Worldwide except for North America
RevenueIncrease US$ 3 billion (2017)[2]
US$ -149.8 million (FY 2012)
OwnersWolverine World Wide
Blum Capital
Golden Gate Capital
Number of employees
18,000 (2018)[2]
WebsiteArchived official website at the Wayback Machine (archive index)

Payless ShoeSource Inc. is an international discount footwear chain. During early 2019, Payless ShoeSource announced all North American stores including their e-commerce platform were filed for bankruptcy. The filing excludes stores outside of North America, which will continue to operate.[3][4] Established in 1956 by cousins Louis and Shaol Pozez, Payless is a privately held company owned by Blum Capital, and Golden Gate Capital. In 1961, it became a public company as the Volume Shoe Corporation which merged with The May Department Stores Company in 1979. In the 1980s, Payless was widely known in the U.S. for its Pro Wings line of discount sneakers, which often had Velcro straps instead of laces. In 1996, Payless ShoeSource became an independent publicly held company. In 2004, Payless ShoeSource announced it would exit the Parade chain and would close 100 Payless Shoe outlets. On August 17, 2007, the company acquired the Stride Rite Corporation and changed its name to Collective Brands, Inc.[5][6] The company had a total revenue for 2011 of US$ 3.4 billion.[7] The company also has a stunt premium banner, Palessi Shoes.[8]

It was announced on May 1, 2012, that the company would be purchased by Wolverine World Wide, Blum Capital, and Golden Gate Capital for US$1.32 billion. On December 13, 2016 it was reported that all Payless shoe stores were to be closed in Australia with the loss of 730 jobs.[7][9] On July 14, 2014, Authentic Brands Group acquired some assets from Payless ShoeSource's division Collective Licensing International, LLC, which included brands such as Airwalk, Hind sports clothing, Vision Street Wear, and Above The Rim.[10] In April 2017, Payless Shoesource filed for Chapter 11 bankruptcy and announced the closing of 400 stores in the United States.[11]

On February 14, 2019, Payless ShoeSource filed for bankruptcy again and closed its e-commerce platform and all remaining 2,100 stores in United States and Puerto Rico.[1] On February 19, 2019, it was announced that all 248 stores in Canada would also close.[4] Its franchise operations and stores in other countries will not be affected.[12]

History[edit]

Former Payless ShoeSource logo used until 2006.

Acquisitions[edit]

Circa 1962–63, Volume Shoe company purchased the original Hill Brothers Shoe Company based in Kansas City, Missouri and converted all 25 of their stores to the "Payless" name. In 1971, Volume Shoe obtained the second Hill Brothers Shoe Store chain that was started in St. Louis, Mo in 1956 by Al Melnick and Sol Nathanson with the assistance and aid of the original Hill Brothers in Kansas City. The St. Louis version of "'Hill Brothers Self Service Shoe Store'" went from 3 to 103 stores in the Midwest and South between 1956 and 1971. Volume Shoe originally operated the 103 stores under the "Hill Brothers Self Service" name.

Payless ShoeSource store, Briarwood Mall, Ann Arbor, Michigan

Starting in 1972, Volume Shoe began to consolidate stores in proximity and convert others to the "Payless" brand. The St. Louis operation of "'Hill Brothers Self Service'" stores were known for their bare bones minimalism and the slogan "two for five – man alive!", that is, women and children's shoes were two pair for five dollars.[13]

Payless bought Picway Shoes from the Kobacker department store chain in 1994.[14]

Key dates[edit]

  • 1956: Pay-Less National is founded in Topeka, Kansas, by two cousins, Louis and Shaol Pozez, to open self-service stores selling budget footwear.
  • 1962: The company goes public as Volume Distributors.
  • 1967: The company is renamed Volume Shoe Corporation; an accelerated expansion program is launched.
  • 1971: Volume Shoe Corp. acquires the St. Louis based Hill Brothers Self Service Shoe Store
  • 1978: The Payless ShoeSource name is adopted for the bulk of the company's retail outlets.
  • 1979: Volume Shoe is acquired by the May Department Stores Company.
  • 1991: The company name is changed to Payless ShoeSource, Inc.
  • 1996: May spins Payless off to shareholders, making it once again an independent, publicly traded firm.
  • 1997: The mid-priced shoe chain Parade of Shoes is acquired from J. Baker, Inc.; the first Canadian Payless stores open.
  • 1999: The firm launches e-commerce at payless.com; Payless opens locations on the sales floor inside Shopko discount stores, replacing J. Baker.
  • 2000: Payless enters into a joint venture to expand into the Central American region.
  • 2004: As part of a major restructuring, Payless announces that it will close down the Parade chain and close hundreds of Payless ShoeSource outlets.[15]
  • 2012: Collective Brands Inc., which owns footwear brands such as Sperry Top-Sider and Keds as well as the retailer Payless ShoeSource, will be split in two by multiple buyers, Wolverine Worldwide, Blum Capital and Golden Gate Capital, in a purchase valued at $2 billion, including debt.[16][17][18]
  • 2017: Payless Shoesource filed for Chapter 11 bankruptcy and closed 400 stores nationwide.[19]
  • 2019: Payless filed for a second bankruptcy and closed all their remaining stores in the United States and Canada.[20]

Expansion[edit]

Interior of a Payless ShoeSource in Groveton, Virginia
Payless ShoeSource in Fairview Mall

On June 27, 2006, Payless announced that it was launching a new logo created to represent a more stylish, upscale and contemporary company. This is the first rollout of stores in 2012 and beyond.[citation needed]

  • Canada: At the end of 2018, Payless had 248 stores in Canada, however, it was announced in February 2019 that all of the stores would be closed.
  • St. Lucia: In 2014, Payless opened its first store in St. Lucia at the Baywalk Mall in Gros-Islet. This is one of two Payless stores located on the island of St. Lucia.
  • Australia: In 2013, Payless ShoesSource bought Payless Shoes Australia's full 150 stores, which has operated since 1980 out of administration. Previously, these two companies did not have any affiliation.[21] On December 13, 2016, it was reported that all Payless shoe stores were to be closed in Australia with the loss of 730 jobs.[7][9]
  • Trinidad and Tobago: Payless Shoesource has a total of 22 stores across Trinidad and Tobago, having first opened its doors in 2001.
  • Barbados: In 2012, Payless expanded into the Barbados market by opening the first ten-employee store at Haggatt Hall, St. Michael. The group's CEO announced four more are also planned to open, and this will increase its local operations to 50 employees.
  • Jamaica: Payless ShoeSource opened in Jamaica in January 2011, and today has a total of 12 stores on the island.
  • Indonesia, Singapore, and Malaysia: In April 2011, Payless launched its first store in Jakarta, Indonesia followed by one store in Kuala Lumpur and Singapore within the same year and under the same management. Payless Shoesource operates 19 stores throughout Indonesia currently.
  • Thailand: The Central Marketing Group (CMG), a business unit of the Central Group, has signed a franchise agreement with Kansas-based Payless ShoeSource that will see outlets next year in BangkokChonburi, making Thailand its 15th franchise country. It will also adopt Payless's new Hot Zone format and purchase products directly from the seasonal assortments, with slight adjustments for local needs.[23]

Collective Licensing International, LLC[edit]

Payless ShoeSource, operating as Collective Brands, Inc. formed a division called Collective Licensing International, LLC (CLI) in January 2004, which was based in Englewood, Colorado. CLI held and owned various clothing and sport brands, particularly "youth lifestyle brands" and board-sport brands such as Airwalk, Vision Street Wear, Sims, Lamar and LTD, World Snowboarding Championships, Sugarboards, Carve, genetic, Dukes, Rage, Ultra-Wheels, Hind, Spot Bilt and Skate Attack.[24] The primary purpose of the division was to develop brands and provide them with marketing and branding guidance in various markets.[25]

In 2010, CLI acquired Above The Rim from Reebok International for an undisclosed amount.

On July 14, 2014, Authentic Brands Group acquired some assets from Payless ShoeSource's division Collective Licensing International, LLC.

2017 bankruptcy[edit]

A closing Payless store at Springfield Town Center

In April 2017, the company, struggling with the migration of retail shopping to e-commerce, filed for Chapter 11 bankruptcy.[26] It plans to immediately liquidate nearly 400 stores in the United States and Canada. Prior to the bankruptcy, heavily loaded with debt due to a private equity buy out, the company's credit rating was downgraded by Moody's. It has $100 million in loans that will come due in the next five years.[27] The company's bankruptcy announcement was part of a trend of retail closures in 2016–2017 known as the retail apocalypse.[28]

Payless emerged from bankruptcy court protection in August 2017. The company was the first among a group of retailers going through bankruptcy since 2016 to successfully complete the process of restructuring.[19]

2019 bankruptcy and liquidation[edit]

On February 14, 2019, Payless ShoeSource filed for bankruptcy again and closed all 2,100 stores in the United States by May 2019.[29] On February 19, 2019, it announced would also close 248 stores in Canada.[4] The 790 stores across Latin America and the other stores internationally would not be affected.[30]

References[edit]

  1. ^ a b http://www.thedenverchannel.com/news/national/payless-shoesource-begins-liquidation-sales-halts-online-sales
  2. ^ a b "Payless Holdings on the Forbes America's Largest Private Companies List". Retrieved 15 February 2019.
  3. ^ Tyko, Kelly (15 February 2019). "Payless ShoeSource closing all 2,100 U.S. stores, starting liquidation sales Sunday". USA Today. Retrieved 16 February 2019.
  4. ^ a b c Global News (19 February 2019). "Payless to close all 248 Canadian stores, liquidation sales expected". Global Television. The Canadian Press.
  5. ^ "Find Articles".[permanent dead link]
  6. ^ "PAYLESS SHOESOURCE ANNOUNCES CLOSE OF STRIDE RITE ACQUISITION AND HOLDING COMPANY NAME CHANGE TO COLLECTIVE BRANDS, INC. – Payless". Archived from the original on 4 May 2016. Retrieved 9 June 2016.
  7. ^ a b c Hawley, Brenna (May 1, 2012), "Payless ShoeSource owner agrees to $2B sale", Kansas City Business Journal, bizjournals.com, retrieved May 27, 2012
  8. ^ Will Burns (30 November 2018). "Payless Boosts Value Of Products With Brilliant 'Palessi' Stunt". Forbes Magazine.
  9. ^ a b "Owner of Payless, Stride Rite stores being sold". Archived from the original on May 2, 2012. Retrieved March 17, 2017.
  10. ^ Steinberg, Haley (July 30, 2014). "Authentic Brands Group, LLC Acquires Collective Licensing, LP, Including Iconic Global Lifestyle Brand 'Airwalk,' From Payless Holdings LLC". PR Newswire. Retrieved March 16, 2017.
  11. ^ Gustafson, Krystina (2017-04-04). "Payless ShoeSource files for Chapter 11 bankruptcy". CNBC. Retrieved 2017-11-20.
  12. ^ "Payless ShoeSource closing all 2,100 stores, starting liquidation sales Sunday". www.msn.com. Retrieved 2019-02-16.
  13. ^ Oltrogge, Sarah C. Images of America: East Village. Arcadia Publishing SC: February 2010. Page 43.
  14. ^ "Picway Shoe Stores to Go Out of Business after Takeover by Payless. (Originated from Akron Beacon Journal, Ohio)". 29 August 1994. Archived from the original on 4 March 2016. Retrieved 9 June 2016.
  15. ^ "History of Payless ShoeSource, Inc. – FundingUniverse". Retrieved 9 June 2016.
  16. ^ "San Francisco's Golden Gate Capital, Blum Capital slip into Payless ShoeSource – San Francisco Business Times". Retrieved 9 June 2016.
  17. ^ "Payless and Keds to be split in $1.32 billion buyout". 1 May 2012. Retrieved 9 June 2016 – via Reuters.
  18. ^ Rusli, Evelyn M. "Investor Group Carves Up Collective Brands". Retrieved 9 June 2016.
  19. ^ a b "Payless emerges from bankruptcy court protection after closing more than 673 stores". USA TODAY. Retrieved 2017-08-31.
  20. ^ Bursztynsky, Lauren Hirsch, Jessica (2019-02-08). "Payless preparing for bankruptcy with store closures". www.cnbc.com. Retrieved 2019-02-10.
  21. ^ "Payless buys Payless Shoes from administration". 15 March 2013. Retrieved 9 June 2016.
  22. ^ Payless PH Official site
  23. ^ http://www.bangkokpost.com/business/retail/269054/cmg-walks-off-with-payless-franchise CMG walks off with Payless franchise Published: 3/12/2011
  24. ^ "Collective Brands, Inc. Acquires Above The Rim Brand(R) From Reebok International". SEC Marketwire. January 15, 2010. Retrieved March 21, 2017.
  25. ^ "Company Overview of Collective Licensing International, LLC". Bloombert. Retrieved March 16, 2017.
  26. ^ "Payless Restructuring Plan". Payless. Retrieved April 22, 2017.
  27. ^ Gustafson, Krystina (April 4, 2017). "Payless ShoeSource files for Chapter 11 bankruptcy". CNBC. Retrieved April 4, 2017.
  28. ^ "Changing retail: Is everything you know about 'retail apocalypse' wrong?". USA TODAY. Retrieved 2017-11-20.
  29. ^ "Report: Payless ShoeSource closing all stores after filing for bankruptcy". MYSTATELINE. Feb 14, 2019. Retrieved Feb 16, 2019.
  30. ^ "Payless Files for Voluntary Chapter 11 Protection in the U.S. and Intends to File for CCAA Protection in Canada". www.businesswire.com. 2019-02-19. Retrieved 2019-02-19.

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