Payless ShoeSource is reportedly gearing up for another round in bankruptcy court, with one news outlet reporting it could happen within the next two weeks.
Citing people familiar with the situation, CNBC reported that as part of the potential bankruptcy the shoe retailer is looking to offload its real estate to buyers. The real estate sales could come by selling large blocks of stores located in certain parts of the country. If there are no buyers to be had, the retailer may be forced to close most of the stores, or worse, all of the stores located in North America. The sources told the news outlet that the plans are changing and that Payless may end up avoiding a bankruptcy if it finds a buyer for the company.
This would mark the second time in a few years that Payless filed for bankruptcy. The last time was in April of 2017. Since then it has shuttered around 400 stores. It employs 2,700 in North America, noted CNBC in the report. If it did end up filing for bankruptcy it would add to the growing list of retailers that came out of bankruptcy only to find their way back in a few years later. As one example, the report cited Gymboree, which filed for bankruptcy for the second time in under two years.
In January Reuters, citing sources familiar with the matter, reported Payless had hired an advisor to help it avoid a second bankruptcy filing. At the time the news outlet reported Payless was looking at selling the company or restructuring it. It was also mulling closing one third or more of its retail stores. The investment bank Payless tapped is PJ Solomon, reported Reuters, noting the firm is tasked with determining the best course of action for the shoe retailer. When Payless came out of bankruptcy in 2017 it had around $400 million in loans and cut its debt by more than $800 million.