Payless (footwear retailer)
| Company type | Private |
|---|---|
| Industry | Retail (footwear) |
| Predecessor | Volume Shoe Corporation |
| Founded | January 1, 1956 in Topeka, Kansas, United States |
| Founder | Louis Pozez, Shaol Pozez |
| Fate | Filed for bankruptcy in 2017 and 2019; reemerged in 2020 with rebranding |
| Successor | Payless (rebranded) |
| Headquarters | Edgewater, Florida , United States |
Area served | Worldwide (over 40 countries as of 2018) |
Key people | Justo Fuentes (CEO) |
| Products | Footwear |
| Owner | Investors led by Alden Global Capital and Axar Capital Management (as of 2020) |
Number of employees | 18,000 (2018) |
| Parent | None |
| Website | www |
Payless ShoeSource Worldwide, LLC (previously known as Payless ShoeSource Inc.) was a global American discount footwear retailer established in 1956 by cousins Louis and Shaol Pozez. The company went public under the name Volume Shoe Corporation in 1961 and was later acquired by The May Department Stores Company in 1979. During the 1980s, Payless gained recognition for its Pro Wings budget-friendly sneakers. It became an independent publicly traded firm again in 1996. In 2007, Payless took over Stride Rite Corporation and rebranded itself as Collective Brands, Inc.. By 2020, ownership had shifted to investors led by Alden Global Capital and Axar Capital Management.
On May 1, 2012, Wolverine World Wide, along with Blum Capital and Golden Gate Capital, purchased the company for $1.32 billion. In December 2016, Payless shut down all its Australian outlets, which led to the loss of 730 jobs. In 2014, Authentic Brands Group acquired several labels from Payless's Collective Licensing International segment, including Airwalk and Vision Street Wear.
Facing financial difficulties in 2019, Payless filed for bankruptcy protection in North America and closed all stores in the U.S. and Canada while continuing operations internationally. The company reemerged from bankruptcy in January 2020 and underwent a rebranding to simply Payless in August of that year, simultaneously relaunching its online retail platform.
Based in North Miami, Florida, as of 2018 Payless operated over 3,500 locations across more than 40 countries. The company reported revenues near $3 billion in 2017 and employed approximately 18,000 people. CEO Justo Fuentes directs the company’s strategic focus on affordable footwear products and expanding its presence globally.
Acquisitions
In 1956, cousins Louis and Shaol Pozez founded Pay-Less National in Topeka, Kansas, launching self-service stores specializing in budget footwear. Between 1962 and 1963, Volume Shoe acquired the original Hill Brothers Shoe Company based in Kansas City, Missouri, converting its 25 outlets to the "Payless" brand name. In 1971, Volume Shoe further expanded by purchasing a second Hill Brothers chain initiated by Al Melnick and Sol Nathanson in St. Louis, which had grown from three to 103 stores throughout the Midwest and Southern regions. These locations operated under the "Hill Brothers Self Service" banner.
Beginning in 1972, Volume Shoe began consolidating nearby stores and rebranding many as "Payless." The St. Louis "'Hill Brothers Self Service'" stores were characterized by their no-frills approach and promoted with the slogan "two for five – man alive!", offering two pairs of women’s or children’s shoes for five dollars. In 1979, Volume Shoe was acquired by The May Department Stores Company.
In 1994, Payless purchased Picway Shoes from Kobacker department stores. Two years later, May spun off Payless into an independent publicly traded corporation. In 1997, Payless broadened its portfolio by acquiring mid-tier chain Parade of Shoes from J. Baker, Inc., establishing outlets within Shopko discount stores. However, during a restructuring phase in 2004, Payless closed Parade along with hundreds of its own stores.
On June 27, 2006, Payless unveiled a new logo aimed at projecting a more sophisticated and modern brand identity. In 2018, the company launched the Palessi Shoes marketing stunt campaign to highlight its products’ ability to rival those of luxury designer brands, enhancing consumer perception of the brand.
2017 Bankruptcy Proceedings
In April 2017, confronted with difficulties stemming from the rise of online shopping, the company initiated a Chapter 11 bankruptcy filing and shuttered 673 stores across the United States. Encumbered by debt resulting from a private equity acquisition, Moody's downgraded its credit rating, highlighting $100 million in loans maturing within five years. This bankruptcy occurred amid the widespread retail sector decline often referred to as the retail apocalypse.
By August 2017, Payless successfully exited bankruptcy protection, becoming the first among several retailers since 2016 to finalize a restructuring process.
2019 Bankruptcy and 2020 Reorganization
On February 14, 2019, Payless filed for bankruptcy once more, leading to the closure of all 2,100 U.S. outlets by May and announcing plans to shut down 248 Canadian stores. Locations in Latin America and other international territories were not impacted. Industry analysts pointed out that Payless struggled to keep pace with changing retail dynamics and growing competition.
Payless reemerged from bankruptcy on January 16, 2020, with intentions to revamp its U.S. e-commerce operations. On August 18, 2020, it officially removed 'ShoeSource' from its brand name, relaunched its online platform, and revealed plans to open between 300 and 500 standalone stores across North America within five years. Additionally, the company relocated its headquarters from Topeka, Kansas to Edgewater, Florida.
Locations
- Canada: Operated 248 stores until their closure by February 2019.
- Eastern Caribbean: Expanded since 2014 with two stores in St. Lucia and one each in Antigua, Grenada, St. Kitts, Dominica, and St. Vincent.
- Australia: Acquired Payless Shoes Australia’s 150 stores in 2013 after they had been under administration since 1980; all Australian locations closed by December 2016, resulting in approximately 730 job losses.
- Trinidad and Tobago: Maintains a presence with 23 stores since entering the market in 2001.
- Guyana: Entered in 2021 with a second store added in January 2023.
- Barbados: Began operations in 2012 with one store at Haggatt Hall; now expanded to five locations island-wide.
- Jamaica: Established operations in January 2011; currently runs 15 stores.
- Philippines: As of March 2019, operates a network of 76 stores.
- Indonesia, Singapore, and Malaysia: Launched first store in Jakarta in April 2011 followed by outlets in Kuala Lumpur and Singapore; currently operates 19 stores throughout Indonesia.
- Thailand: Through a franchise agreement with Central Marketing Group (CMG), expanded into Bangkok and Chonburi as its fifteenth franchise country; stores feature the Hot Zone format with tailored product selections.
- United Arab Emirates: Managed by AlShaya Group with locations in Dubai Mall, Mirdif City Center, Sahara Center, and Bawadi Mall in Al Ain.
Collective Brands
Collective Brands, Inc. functioned as an American holding entity overseeing Payless ShoeSource, Robeez, and Airwalk. In 2012, it was acquired by Wolverine World Wide, Blum Capital, and Golden Gate Capital.
The Stride Rite Corporation acquired brands such as Sperry Top-Sider and Keds in 1979, added Saucony in 2005, and purchased Robeez in 2006. During the 2000s, Payless acquired many of these companies and rebranded itself as Collective Brands, Inc. in 2007.
Under the Collective Brands umbrella, Payless established Collective Licensing International, LLC (CLI) in 2004 to manage youth lifestyle and board-sport brands including Airwalk, Vision Street Wear, Sims, Lamar, among others. CLI concentrated on brand development and marketing across diverse markets. In 2010, CLI acquired Above The Rim from Reebok International.
On October 9, 2012, Collective Brands announced completion of its $2 billion acquisition by Golden Gate Capital and Blum Capital. Following this transaction, Payless ShoeSource and CLI operated privately as Payless Holdings while Wolverine World Wide took ownership of Stride Rite Corporation along with Sperry Top-Sider, Keds, Saucony, and additional brands.
In July 2014, Authentic Brands Group purchased assets from Collective Licensing International’s portfolio including the Airwalk brand.
External links
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