Payless Reportedly Looking To File For Bankruptcy, Possibly Next Week

There are certain givens when it comes to mall shopping: There’s always parking at Sears, and there’s a darn good chance you’ll find a Payless Shoesource store. However, the discount footwear retailer could see its roster of 4,000 locations slashed if reports of an impending bankruptcy filing are to be believed.

Back in February, the chain was reportedly considering shuttering about 1,000 stores, but sources tell Bloomberg News that the chain is looking to close 400 to 500 stores, then reorganize.

What would a reorganized Payless look like? It would definitely be smaller, and might leave some of the 30 countries where it does business. The retailer’s mall neighbors have been closing their doors, too. Stores ranging from big anchors to small RadioShacks have already left malls. Stores that sell clothing and accessories have been hit especially hard. The convenience and discounts from shopping online now apparently outweigh the inability to try things on.

Payless also happens to have significant debt, with a term loan of more than half a billion dollars coming due in 2021. The retailer would have to sell a lot of BOGO glitter ballet flats to cover that payment, if it can’t somehow restructure its debt. That could mean filing for Chapter 11 and reducing its footprint.