SHOE DROPS

Payless to Close 400 Stores After Filing for Bankruptcy

Discount footwear chain Payless ShoeSource will close 400 stores after filling for bankruptcy protection. The retailer, with 4,400 stores in more than 30 countries, said Tuesday it reached an agreement with some of its top lenders to cut debt by 50 percent, allowing the company to remain in business and pay off debt through the Chapter 11 process. “This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify,” Payless CEO W. Paul Jones said in a statement announcing the news. In addition to closing stores throughout the U.S. and Puerto Rico, the company said it will also “aggressively manage” its real-estate lease portfolio, while also making plans to expand in international markets. The company hopes to make a comeback despite the closures, with new $80 million term-loan financing that it says will allow it finish Chapter 11 “well positioned for future growth and profitability post-restructuring.” Payless is the latest retailer to struggle to keep a foothold in the market, as online retailers like Amazon and Zappos expand.