Louisiana consumers who like to buy nice looking shoes for low prices often shop at Payless. The discount shoe mogul has stores spread across the country. However, financial crisis has been a main theme in the store’s recent past and, apparently, the present as well. In fact, the company is seeking debt relief in the form of Chapter 11 bankruptcy.
Because it is the second time the store has sought this type of financial protection, many people are jokingly referring to it as a Chapter 22 bankruptcy. Payless is not the only company to file for Chapter 11 twice. Unfortunately, 16,000 workers will lose their jobs, since more than 2,000 stores will be closing in the United States and Canada.
Payless has been serving customers for more than 60 years. Like Gymboree, RadioShack and other stores, however, it has been unable to restore financial stability after taking several hard hits within a few years’ time. Payless officials say a computer glitch hurt its back-to-school profits last year, which in turn caused a surplus of holiday inventory that forced the company to lower its prices. The situation caused more than a $60 million loss.
While the current debt relief plan is implemented, Payless will continue to operate 400 stores in other countries. Any business owner in Louisiana facing serious financial quandaries may benefit from consulting with an experienced bankruptcy law attorney. Such consultation often provides needed guidance and support that can help a faltering company devise a plan to eliminate debt and lay the groundwork for a stronger financial future.
