There are multiple rumors that Payless ShoeSource will be closing many, many stores in 2017. The word on the street is that up to (or over) 1,000 Payless Stores may be closed. They are running out of cash and the creditors are getting nervous – if they manage to negotiate debt restructure they may survive, but it’s gonna be really though. Payless is one of the largest retail chains period – they have about 4500 stores all around the world, 3000+ here in the States – the problem is there have 600+ million dollars in debt, that’s gonna be hard to repay, and if you assume 10% interest rate, every month they need to make 5 million profit just to service debt.
On top of this, there is less traffic in the malls as people are shopping online – if you need cheap shoes you can find them on Amazon, they will ship for free too. Now, not all Payless stores will be closed, not all Payless stores will be in malls and it’s not all that bad, but they will close some locations for sure. Now, I am not sure if they will close 1/3 of all stores, 1000 sounds like a lot but it’s possible. Many thousands of people would lose jobs, retail does not pay well, and those jobs are just much harder to find today than 10 years ago.
Finally, we just learned that the Limited closed pretty much all stores – guess what’s gonna happen to Payless (they are in equally bad position). Let’s see if and how many stores close.