Payless (footwear retailer)

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Payless
FormerlyPayless ShoeSource Inc.
TypePrivate
IndustryShoes, socks, accessories
Founded1956; 65 years ago (1956)
FoundersLouis and Shaol Pozez
FateU.S. and Canadian stores liquidated due to Chapter 11 bankruptcy
Relaunched in August 2020
HeadquartersMiami, FL, U.S.
Number of locations
3,500+ (40 countries) (2018)[1]
Area served
30+ countries (2019)
Key people
Jared Margolis (CEO)
RevenueIncrease US$3 billion (2017)[2]
−US$149.8 million (FY2012)
OwnersFormer,
Number of employees
18,000 (2017)[2]
Websitehttps://www.payless.com/

Payless (formerly known as Payless ShoeSource Inc.) is an international discount footwear chain. Established in 1956 by cousins Louis and Shaol Pozez, Payless was 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 became an independent publicly held company. In 2004, Payless 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.[3][4] The company had a total revenue for 2011 of US$ 3.4 billion.[5] The company also has a stunt premium banner, Palessi Shoes.[6] Payless is currently owned by a group of investors led by Alden Global Capital and Axar Capital Management.

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.[5][7] On July 14, 2014, Authentic Brands Group acquired some assets from Payless's division Collective Licensing International, LLC, which included brands such as Airwalk, Hind sports clothing, Vision Street Wear, and Above The Rim.[8]

In 2019, North American stores including their e-commerce platform filed for bankruptcy. The filing excluded stores outside of North America, which will continue to operate.[1][9] Payless emerged from bankruptcy on January 16, 2020, and on August 18, 2020, Payless officially dropped 'ShoeSource' from its name, and launched its ecommerce website.

History[]

Former Payless ShoeSource logo used until 2006.

Acquisitions[]

Payless ShoeSource store, Briarwood Mall, Ann Arbor, Michigan

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.

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.[10]

Payless bought Picway Shoes from the Kobacker department store chain in 1994.[11]

Key dates[]

  • 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 outlets.[12]
  • 2012: Collective Brands Inc., which owns footwear brands such as Sperry Top-Sider and Keds as well as the retailer Payless, 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.[13][14][15]
  • 2017: Payless ShoeSource filed for Chapter 11 bankruptcy and closed 673 stores nationwide.[16]
  • 2019: Payless filed for a second bankruptcy and closed all their remaining stores in the United States and Canada.[17]
  • 2020: Payless emerges from bankruptcy and plans to re-launch a U.S. e-commerce site.[18]
  • August 18, 2020: Payless announces relocation of company headquarters from Topeka, Kansas to Edgewater, Florida.[19]

Expansion[]

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.
  • Eastern Caribbean: 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. Antigua, Grenada, St. Kitts, Dominica and St. Vincent all have one store each.
  • 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.[20] On December 13, 2016, it was reported that all Payless shoe stores were to be closed in Australia with the loss of 730 jobs.[5][7]
  • Trinidad and Tobago: Payless 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. This has since grown to 5 stores across the island.
  • Jamaica: Payless opened in Jamaica in January 2011, and today has a total of 15 stores on the island.
  • Philippines: As of March 2019, Payless has 76 stores in the Philippines.[21]
  • 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 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 that will see outlets next year in Bangkok – Chonburi, 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.[22]
  • United Arab Emirates: It belongs to AlShaya group in the UAE. It has opened different branches in Dubai Mall, Mirdif City Center and Sahara Center, and also in Bawadi Mall in Al-Ain City.[citation needed]

Collective Licensing International, LLC[]

Payless, 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.[23] The primary purpose of the division was to develop brands and provide them with marketing and branding guidance in various markets.[24]

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's division Collective Licensing International, LLC.

2017 bankruptcy[]

In April 2017, the company, struggling with the migration of retail shopping to e-commerce, filed for Chapter 11 bankruptcy.[25] It planned to immediately liquidate nearly 400 stores in the United States and Canada.[needs update] 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.[26] The company's bankruptcy announcement was part of a trend of retail closures in 2016–2017 known as the retail apocalypse.[27][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.[16]

2019 bankruptcy and revival in 2020[]

A closing Payless store at Springfield Town Center, Springfield, Virginia in 2019

On February 14, 2019, Payless filed for bankruptcy again for a second time and this time they 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.[9] The 790 stores across Latin America and the other stores internationally would not be affected.[30] Payless emerged from bankruptcy on January 16, 2020, with plans to re-launch a U.S. e-commerce site.[18] On August 18, 2020, Payless, officially dropping 'Shoesource' from its name, did relaunch its ecommerce website. It also announced plans to open between 300 and 500 free-standing stores in North America over the next five years.[31]

References[]

  1. ^ Jump up to: a b Tyko, Kelly (February 15, 2019). "Payless ShoeSource closing all 2,100 U.S. stores, starting liquidation sales Sunday". Money. USA Today. Gannett. Retrieved 16 Jan 2020.
  2. ^ Jump up to: a b "Payless Holdings". America's Largest Private Companies (2019 Ranking). Forbes. Retrieved 16 Jan 2020.
  3. ^ "Find Articles".[permanent dead link]
  4. ^ "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.
  5. ^ Jump up to: 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
  6. ^ Will Burns (30 November 2018). "Payless Boosts Value Of Products With Brilliant 'Palessi' Stunt". Forbes Magazine.
  7. ^ Jump up to: a b "Owner of Payless, Stride Rite stores being sold". Archived from the original on May 2, 2012. Retrieved March 17, 2017.
  8. ^ 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.
  9. ^ Jump up to: a b Staff (February 19, 2019). "Payless to close all 248 Canadian stores, liquidation sales expected". Global News. Corus Entertainment. The Canadian Press. Retrieved 16 Jan 2020.
  10. ^ Oltrogge, Sarah C. Images of America: East Village. Arcadia Publishing SC: February 2010. Page 43.
  11. ^ "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. Cite journal requires |journal= (help)
  12. ^ "History of Payless ShoeSource, Inc. – FundingUniverse". Retrieved 9 June 2016.
  13. ^ "San Francisco's Golden Gate Capital, Blum Capital slip into Payless ShoeSource – San Francisco Business Times". Retrieved 9 June 2016.
  14. ^ "Payless and Keds to be split in $1.32 billion buyout". 1 May 2012. Retrieved 9 June 2016 – via Reuters.
  15. ^ Rusli, Evelyn M. "Investor Group Carves Up Collective Brands". Retrieved 9 June 2016.
  16. ^ Jump up to: a b "Payless emerges from bankruptcy court protection after closing more than 673 stores". USA TODAY. Retrieved 2017-08-31.
  17. ^ Bursztynsky, Lauren Hirsch, Jessica (2019-02-08). "Payless preparing for bankruptcy with store closures". www.cnbc.com. Retrieved 2019-02-10.
  18. ^ Jump up to: a b "Payless ShoeSource plots comeback: Dayton Business". WHIO-TV. Retrieved 2020-01-17.
  19. ^ "Ingram's :: Payless headquarters in Topeka relocates to Miami, Fla". Retrieved 2020-08-25.
  20. ^ "Payless buys Payless Shoes from administration". 15 March 2013. Retrieved 9 June 2016.
  21. ^ Payless PH Official site
  22. ^ http://www.bangkokpost.com/business/retail/269054/cmg-walks-off-with-payless-franchise CMG walks off with Payless franchise Published: 3/12/2011
  23. ^ "Collective Brands, Inc. Acquires Above The Rim Brand(R) From Reebok International". SEC Marketwire. January 15, 2010. Retrieved March 21, 2017.
  24. ^ "Company Overview of Collective Licensing International, LLC". Bloombert. Retrieved March 16, 2017.
  25. ^ "Payless Restructuring Plan". Payless. Retrieved April 22, 2017.
  26. ^ Gustafson, Krystina (April 4, 2017). "Payless ShoeSource files for Chapter 11 bankruptcy". CNBC. Retrieved April 4, 2017.
  27. ^ "Changing retail: Is everything you know about 'retail apocalypse' wrong?". USA TODAY. Retrieved 2017-11-20.
  28. ^ Irwin, Neil (February 1, 2020). "How private equity buried Payless". The New York Times. Retrieved 2 February 2020.
  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.
  31. ^ https://www.foxbusiness.com/retail/payless-makes-comeback-with-launch-of-new-ecommerce-platform

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