Payless ShoeSource is to start winding down its North American business and its e-commerce operation after receiving approval from the US Bankruptcy Court for first day motions related to its Chapter 11 Bankruptcy protection filing. A&G Realty Partners has been retained to manage the sale of 2,587 Payless store leases across the US and Canada.
The approvals at a 19 February hearing in St Louis, Missouri will support the company’s efforts to wind-down all of its stores in the US, Puerto Rico and Canada, as well as its e-commerce operations.
The US Bankruptcy Court’s customary initial relief includes authorisation to support Payless operations during the process, continue payment of employee wages and maintain employee benefits and pay claims of critical vendors. The Court also approved procedures and policies for US liquidation sales.
The application for bankruptcy protection was made on Tuesday (19 February) with Payless attributing the move to challenges in the retail market. It is the second time the company has filed for bankruptcy protection since April 2017.
Payless said it emerged from the prior reorganisation “ill-equipped to survive in today’s retail environment.”
Stephen Marotta, chief restructuring officer of Payless, said: “We are pleased that the court has approved our first day motions, which are a crucial step in our execution of an efficient wind-down of our North American stores and e-commerce operations, and to maximise the value of the merchandise being sold.”
Now, A&G Realty Partners has been retained to manage the sale of 2,587 Payless ShoeSource store leases across the US and Canada.
In a statement yesterday (21 February), the firm said the locations being offered range from 500 sq ft to 10,000 sq ft, with an average size of 3,000 sq ft. The available leases include 255 locations in California, 192 in Texas, 170 in Florida, and 157 in New York.
Plans call for the leases to be sold under a multi-tiered process, aligned with groups of monthly store closings that are expected to begin in March and conclude in May. Consequently, the leases will be sold in a series of auctions.
“With locations available in all 50 states, the District of Columbia, Puerto Rico, and all ten Canadian provinces, the Payless leases offer incredible market penetration opportunities for food, fashion, or service brands looking to enter new regions,” said A&G co-president Emilio Amendola. “The diversity of the Payless leases – with urban, suburban strip centre, freestanding highway and mall stores – creates a wide range of possibilities for expanding chains seeking affordable rents in prime locations. We expect a strong response from national, regional and local tenants.”
Payless’s 420 stores across 20 countries in Latin America, its stores in the US Virgin Islands, Guam and Saipan, and its 370 international franchisee stores in 16 countries across the Middle East, India, Indonesia, Indochina, Philippines and Africa will continue operating as usual.