Payless ShoeSource Inc on Thursday said it is restructuring its management and administrative teams - including job losses - aimed at cutting its costs by $12 million a year.

The footwear retailer also reported a 6.9 per cent decline in same-store sales during August and said sales fell 6.4 per cent to $218.0 million.

As part of the restructuring efforts, Duane Cantrell has stepped down as company president and will also resign from the board of directors.

Steven J Douglass will add the responsibilities of president to his duties as chairman and chief executive officer.

Last month, Payless detailed a set of restructuring measures, including plans to sell or dispose of 181 Parade stores, the closing of 260 Payless ShoeSource stores, and the sale of its 32 Payless ShoeSource stores in Chile and Peru.

"The new reporting structure will accelerate decision-making, and enable more effective execution of our [core business ] strategy," said Mr Douglass.

"It is part of a plan designed to sharpen our focus on our core business strategy, reduce expenses, increase profitability, improve our company's operating margin and build value for our shareowners over the long term."

"We remain committed to our stated objective of 30 per cent gross margin for fiscal 2004," Douglas said.

"However, to accomplish this objective, the company must achieve low-single-digit positive same-store sales on a consistent basis for the remainder of the year. If the negative sales trend from July and August continues, it will be difficult to attain our fiscal 2004 gross margin objective."

Payless ShoeSource operates around of 5,040 discount stores in the US, Canada, the Caribbean, Puerto Rico, South America, and the South Pacific. It also operates Parade, Bundles and Tootsies stores.