Payless ShoeSource files bankruptcy, plans to close 400 stores

Payless ShoeSource announced Tuesday that the company has filed for Chapter 11 bankruptcy and will close hundreds of stores across the United States.

According to Chicago 5, the shoe company will close nearly 400 stores in the U.S. and Puerto Rico. However, it was unclear Tuesday night which stores were on that list.

The company has six locations in the metro-east, including stores at St. Clair Square in Fairview Heights and in Shiloh, Glen Carbon, Granite City, Alton, and Waterloo.

A notice posted on the company website stated that Payless will continue to operate its businesses and continue all of the company’s commitments, such as providing associate wages, healthcare coverage and honoring pre-petition gift cards with Payless stores and Payless.com.

“Payless has the strong support of its senior lenders for a consensual restructuring through a Plan Support Agreement to reduce debt, materially lower annual cash interest costs, access significant additional capital, and provide a clear path to emergence on an expedited basis,” the notice stated.

The notice also said that Payless has reached agreements with multiple of its existing lenders for access up to $385 million of “debtor-in-possession financing.”

This story was originally published April 4, 2017 at 11:14 PM with the headline "Payless ShoeSource files bankruptcy, plans to close 400 stores."