Five Payless ShoeSource outlets will close in New Mexico, including one in Albuquerque, as part of the company’s decision to file for Chapter 11 bankruptcy protection.
Closures include the store at 8220 Montgomery, along with two in Roswell and one each in Alamogordo and Las Vegas, N.M., The Topeka, Kan.-based retailer said Wednesday. New Mexico will still have 20 lcations, including nine in Albuquerque.
Payless will close nearly 400 stores nationwide as part of the reorganization. It has over 4,400 stores in more than 30 countries and was founded in 1956. It plans to reduce its debt by almost 50 percent, lower how much it pays in interest and line up funds. The company says some of its lenders have agreed to make available up to $385 million to keep the stores running.
“This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify,” said Payless CEO Paul Jones in a statement.
Shoppers are increasingly shifting their buying online or going to discount stores like T.J. Maxx to grab deals on designer brands. That shift has hurt traditional retailers, even low-price outlets like Payless.
In fact, Moody’s Investor Service said earlier this year that the number of “distressed” retailers — those with cash problems and lots of debt that are facing strong competition — is at the highest rate since 2009. It named Payless as one of the retailers.
A number of retailers have closed stores or gone out of business in 2017. The Limited closed all 250 of its remaining stores early this year. It had operated nearly 400 stores at the end of 2000. Teen retailer Wet Seal in January said it would close its 171 stores.