Payless (footwear retailer)

Last updated
Payless ShoeSource Worldwide, LLC
FormerlyPayless ShoeSource Inc.
Company type Private
IndustryShoes, socks, accessories
Founded1956;68 years ago (1956)
FoundersLouis and Shaol Pozez
FateU.S. and Canadian stores liquidated in 2019 due to Chapter 11 bankruptcy
Relaunched in August 2020
Headquarters735 NE 125th St, North Miami, Florida, United States
Number of locations
3,500+ (40 countries) (2018) [1]
Area served
30+ countries (2019)
Key people
Justo Fuentes (CEO)
RevenueIncrease2.svg US$ 3 billion (2017) [2]
−US$149.8 million (FY2012)
Owners
Number of employees
18,000 (2017) [2]
Website www.payless.com

Payless ShoeSource Worldwide, LLC [3] (formerly known as Payless ShoeSource Inc.), is an American multinational 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. [4] [5] As of 2020, Payless is owned by a group of investors led by Alden Global Capital and Axar Capital Management. [6]

Contents

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 in Australia were to be closed with the loss of 730 jobs. [7] [8] 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.

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 e-commerce website.

History

Former Payless ShoeSource logo used until 2006. Some outside-mall stores still used this logo until their closure in 2019. Payless ShoeSource.svg
Former Payless ShoeSource logo used until 2006. Some outside-mall stores still used this logo until their closure in 2019.

Acquisitions

Payless ShoeSource store, Briarwood Mall, Ann Arbor, Michigan Payles ShoeSource Store.JPG
Payless ShoeSource store, Briarwood Mall, Ann Arbor, Michigan

Pay-Less National was founded in 1956 in Topeka, Kansas, by two cousins, Louis and Shaol Pozez, to open self-service stores selling budget footwear. Circa 1962–1963, 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] In 1979, Volume Shoe was acquired by The May Department Stores Company. [11]

Payless bought Picway Shoes from the Kobacker department store chain in 1994. [12] In 1996, May spun off Payless to shareholders, making it once again an independent, publicly traded firm.

Payless acquired the mid-priced shoe chain Parade of Shoes from J. Baker, Inc. in 1997. It opened locations on the sales floor inside Shopko discount stores, replacing J. Baker. As part of a major restructuring, Payless announced in 2004 that it will close down the Parade chain and hundreds of Payless outlets. [11]

On June 27, 2006, Payless announced that it was launching a new logo created to represent a more stylish, upscale and contemporary company.[ citation needed ] In 2018, the company advertised under a stunt premium banner, Palessi Shoes, to demonstrate that its products could pass for high-end designer brands. [13]

2017 bankruptcy

In April 2017, the company, struggling with the migration of retail shopping to e-commerce, filed for Chapter 11 bankruptcy [14] and closed 673 stores nationwide. [15] 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. [16] The company's bankruptcy announcement was part of a trend of retail closures in 2016–2017 known as the retail apocalypse. [17] [18]

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. [15]

2019 bankruptcy and revival in 2020

A closing Payless store at Springfield Town Center, Springfield, Virginia in 2019 Closing Payless outlet at Springfield Town Center.jpg
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. [19] On February 19, 2019, it announced would also close 248 stores in Canada. [9] [20] The 790 stores across Latin America and the other stores internationally would not be affected. [21] Texas A&M University marketing professor and interim director Cheryl H. Bridges then surmised that Payless did not heed the changing retail landscape and "reinvent its stores" quickly enough to stay competitive in a more crowded market. [22]

Payless emerged from bankruptcy on January 16, 2020, with plans to re-launch a U.S. e-commerce site. [23] On August 18, 2020, Payless, officially dropping 'ShoeSource' from its name, did relaunch its e-commerce website. It also announced plans to open between 300 and 500 free-standing stores in North America over the next five years [24] and relocated its company headquarters from Topeka, Kansas to Edgewater, Florida. [25]

Locations

Collective Brands

Collective Brands, Inc. was an American holding company that owned Payless ShoeSource, Robeez, and Airwalk. The company was purchased by Wolverine World Wide, Blum Capital, and Golden Gate Capital in 2012. [29]

Stride Rite Corporation purchased the Sperry Top-Sider and Keds brand names from Uniroyal in 1979. During 2005, Stride Rite completed its acquisition of Saucony. In 2006, Stride Rite purchased footwear brand Robeez. Payless purchased many of these companies during the 2000s, and on August 16, 2007, the company changed its name to Collective Brands, Inc.

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. [30] The primary purpose of the division was to develop brands and provide them with marketing and branding guidance in various markets. [31] In 2010, CLI acquired Above The Rim from Reebok International for an undisclosed amount. [30]

On October 9, 2012, Collective Brands, Inc. announced its acquisition by Golden Gate Capital and Blum Capital was completed. As a result, Payless ShoeSource and Collective Licensing International operate as a private, standalone entity known as Payless Holdings. As part of the transaction, Wolverine World Wide, a Michigan-based boot and shoe manufacturer, acquired Stride Rite Corporation including its Sperry Top-Sider, Keds, Saucony, and other brands from Collective Brands, Inc. The purchase was valued at $2 billion, including debt. [32] [33] [34]

On July 14, 2014, Authentic Brands Group acquired some assets from Payless's division Collective Licensing International, LLC. [35]

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References

  1. 1 2 Tyko, Kelly (February 15, 2019). "Payless ShoeSource closing all 2,100 U.S. stores, starting liquidation sales Sunday". Money. USA Today. Retrieved 16 Jan 2020.
  2. 1 2 "Payless Holdings". America's Largest Private Companies (2019 Ranking). Forbes. Retrieved 16 Jan 2020.
  3. ↑ "Payless Privacy Policy" . Retrieved 2023-10-21.
  4. ↑ "Form 8-K". U.S. Securities and Exchange Commission . August 17, 2007. Retrieved 2024-08-03.
  5. ↑ "PAYLESS SHOESOURCE ANNOUNCES CLOSE OF STRIDE RITE ACQUISITION AND HOLDING COMPANY NAME CHANGE TO COLLECTIVE BRANDS, INC. – Payless" (Press release). Archived from the original on 4 May 2016. Retrieved 9 June 2016.
  6. ↑ Kapner, Suzanne (2020-08-18). "Shoe Seller Payless Attempts a Comeback". The Wall Street Journal . Archived from the original on 2020-08-18. Retrieved 2024-08-08.
  7. 1 2 Hawley, Brenna (May 1, 2012), "Payless ShoeSource owner agrees to $2B sale", Kansas City Business Journal , bizjournals.com, retrieved May 27, 2012
  8. 1 2 "Owner of Payless, Stride Rite stores being sold". Archived from the original on May 2, 2012. Retrieved March 17, 2017.
  9. 1 2 Staff (February 19, 2019). "Payless to close all 248 Canadian stores, liquidation sales expected". Global News. The Canadian Press. Retrieved 16 Jan 2020.
  10. ↑ Oltrogge, Sarah C. Images of America: East Village. Arcadia Publishing SC: February 2010. Page 43.
  11. 1 2 Pederson, Jay P. (2005). International Directory of Company Histories. Vol. 69. Detroit, Michigan: St. James Press. pp. 288–293. ISBN   978-1-55862-544-0. OCLC   367891273 – via Funding Universe.
  12. ↑ "Picway Shoe Stores to Go Out of Business after Takeover by Payless". Akron Beacon Journal, Ohio. 29 August 1994. Archived from the original on 4 March 2016. Retrieved 9 June 2016.
  13. ↑ Will Burns (30 November 2018). "Payless Boosts Value Of Products With Brilliant 'Palessi' Stunt". Forbes.
  14. ↑ "Payless Restructuring Plan". Payless. Archived from the original on April 23, 2017. Retrieved April 22, 2017.
  15. 1 2 "Payless emerges from bankruptcy court protection after closing more than 673 stores". USA TODAY. Retrieved 2017-08-31.
  16. ↑ Gustafson, Krystina (April 4, 2017). "Payless ShoeSource files for Chapter 11 bankruptcy". CNBC. Retrieved April 4, 2017.
  17. ↑ "Changing retail: Is everything you know about 'retail apocalypse' wrong?". USA TODAY. Retrieved 2017-11-20.
  18. ↑ Irwin, Neil (February 1, 2020). "How private equity buried Payless". The New York Times. Retrieved 2 February 2020.
  19. ↑ "Report: Payless ShoeSource closing all stores after filing for bankruptcy". MYSTATELINE. Feb 14, 2019. Retrieved Feb 16, 2019.
  20. ↑ Bursztynsky, Lauren Hirsch, Jessica (2019-02-08). "Payless preparing for bankruptcy with store closures". www.cnbc.com. Retrieved 2019-02-10.{{cite web}}: CS1 maint: multiple names: authors list (link)
  21. ↑ "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.
  22. ↑ Cargo, Kathryn (2019-02-17). "Victoria's Payless ShoeSource to close May 31". Victoria Advocate. Retrieved 24 August 2022.
  23. ↑ "Payless ShoeSource plots comeback: Dayton Business". WHIO-TV . Archived from the original on 2020-01-17. Retrieved 2020-01-17.
  24. ↑ "Payless makes comeback with launch of new e-commerce platform". Fox Business . 18 August 2020.
  25. ↑ "Ingram's :: Payless headquarters in Topeka relocates to Miami, Fla". 20 August 2020. Retrieved 2020-08-25.
  26. ↑ "Payless buys Payless Shoes from administration". Australian Broadcasting Corporation . 15 March 2013. Retrieved 9 June 2016.
  27. ↑ Payless PH Official site
  28. ↑ http://www.bangkokpost.com/business/retail/269054/cmg-walks-off-with-payless-franchise CMG walks off with Payless franchise Published: 3/12/2011
  29. ↑ Hsu, Tiffany (May 2, 2012). "Collective Brands will be split in two in $2-billion acquisition". Los Angeles Times. Retrieved February 6, 2016.
  30. 1 2 "Collective Brands, Inc. Acquires Above The Rim Brand(R) From Reebok International". SEC Marketwire. January 15, 2010. Retrieved March 21, 2017.
  31. ↑ "Company Overview of Collective Licensing International, LLC". Bloombert. Retrieved March 16, 2017.
  32. ↑ "Payless and Keds to be split in $1.32 billion buyout". Reuters. 1 May 2012. Retrieved 9 June 2016.
  33. ↑ "San Francisco's Golden Gate Capital, Blum Capital slip into Payless ShoeSource – San Francisco Business Times" . Retrieved 9 June 2016.
  34. ↑ Rusli, Evelyn M. (May 2012). "Investor Group Carves Up Collective Brands" . Retrieved 9 June 2016.
  35. ↑ Steinberg, Haley (July 30, 2014). "Authentic Brands Group, LLC Acquires Collective Licensing, LP, Including Iconic Global Lifestyle Brand 'Airwalk,' From Payless Holdings LLC" (Press release). PR Newswire. Retrieved March 16, 2017.
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