TOPEKA, Kansas - Shoe chain Payless ShoeSource is filing for Chapter 11 bankruptcy protection, becoming the latest retailer to succumb to increasing competition from online rivals like Amazon.
The Topeka, Kansas-based retailer said Tuesday that it will be closing nearly 400 stores as part of the reorganization. Founded in 1956, the company has more than 4,400 stores in more than 30 countries.
"This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify," said Paul Jones, the company's chief executive officer. "We will build a stronger Payless for our customers, vendors and suppliers, associates, business partners and other stakeholders through this process."
Several Payless stores are located in Berks County, the Lehigh Valley and the surrounding area.
The company said it will release on its website later Tuesday the list of stores to close.
"While we have had to make many tough choices, we appreciate the substantial support we have received from our lenders, who share our belief that we have a unique opportunity to enable Payless — the iconic American footwear retailer with one of the best-recognized global brands — to remain the go-to shoe store for customers in America and around the globe."
Payless plans to reduce its debt by almost 50 percent, lower how much it pays in interest and line up funds. The company said some of its lenders have agreed make available up to $385 million to keep the stores running.
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