Payless Inc. is reportedly discussing a restructuring plan with its lenders. The restructuring plan would involve closings about 1000 of its stores. Currently, Payless operates more than 4400 stores around the country.
Shoe Seller May Be Forced to File Bankruptcy
According to sources familiar with Payless’ financial situation, the shoe seller might be forced to file bankruptcy if it is not able to work out a restructuring plan with creditors. It recently hired a law firm, Kirkland & Ellis to examine its $600 million debt load and look at ways that debt can be managed. Much of this debt was added three years age when the private equity firms Golden Gate and Blum Capital bought Payless.
It appears that Payless is suffering the same fate as some other companies such as Sports Authority and Wet Seal. Many retailers are feeling the pressure from falling foot traffic as more consumers are buying online.
As noted above, Payless is not the only retailer struggling with debt. In fact, the Wall Street Journal reported last week that 13.5% of the retailers covered by Moody’s Investor’s Service presently have debt ratings characterized as “speculative, of poor standing and subject to very high credit risk.” In other words, they’re likely candidates to file for bankruptcy. Some retailers that are in risk of bankruptcy, according to Moody’s portrayal of their debts, are established brands such as David’s Bridal, TOMs Shoes, Sears, and J Crew, among others.
Have you lost your job because your employer closed? Are you dealing with your own large debt load? Please give one of our offices a call and set up a free consultation with one of our attorneys.