Company:Payless ShoeSource

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Payless ShoeSource Inc.
TypePrivate
IndustryShoes, socks, accessories
Founded1956; 68 years ago (1956)
FoundersLouis Pozez
Shaol Pozez
HeadquartersDallas, Texas, U.S.
Number of locations
4,496 (2012)[1]
RevenueIncrease US$ 3 billion (FY 2015)[2]
US$ 97.3 million (FY 2010)
OwnersBlum Capital
Golden Gate Capital
Wolverine World Wide
Number of employees
25,000 (2015)[2]
WebsitePayless ShoeSource

Payless ShoeSource Inc. is an American discount footwear retailer headquartered in Dallas, Texas. Established in 1956 by cousins Louis and Shaol Pozez, Payless is a privately held company owned by Blum Capital, and Golden Gate Capital. In 1961, it became a public company as the Volume Shoe Corporation which merged with The May Department Stores Company in 1979. In the 1980s, Payless was widely known in the U.S. for its Pro Wings line of discount sneakers, which often had Velcro straps instead of laces. In 1996, Payless ShoeSource became an independent publicly held company. In 2004, Payless ShoeSource announced it would exit the Parade chain and would close 100 Payless Shoe outlets. On August 17, 2007, the company acquired the Stride Rite Corporation and changed its name to Collective Brands, Inc.[3][4] The company had a total revenue for 2011 of US$ 3.4 billion.[5]

It was announced on May 1, 2012 that the company would be purchased by Wolverine World Wide, Blum Capital, and Golden Gate Capital for US$1.32 billion. On December 13, 2016 it was reported that all Payless shoe stores were to be closed in Australia with the loss of 730 jobs.[5][6] On July 14, 2014 Authentic Brands Group acquired some assets from Payless ShoeSource's division Collective Licensing International, LLC, which included brands such as Airwalk, Hind sports clothing, Vision Street Wear, and Above The Rim.[7] In April 2017, Payless Shoesource filed for Chapter 11 Bankruptcy and announced the closing of 400 stores in the United States.[8]

History

Former Payless ShoeSource logo used until 2006.

Acquisitions

Circa 1962–63, Volume Shoe company purchased the original Hill Brothers Shoe Company based in Kansas City, Missouri and converted approximately all 25 of their stores to the "Payless" name. In 1971, Volume Shoe obtained the second Hill Brothers Shoe Store chain that was started in St. Louis, Mo in 1956 by Al Melnick and Sol Nathanson with the assistance and aid of the original Hill Brothers in Kansas City. The St. Louis version of "'Hill Brothers Self Service Shoe Store'" went from 3 to 103 stores in the Midwest and South between 1956 and 1971. Volume Shoe originally operated the 103 stores under the "Hill Brothers Self Service" name.

Payless ShoeSource store, Briarwood Mall, Ann Arbor, Michigan

Starting in 1972, Volume Shoe began to consolidate stores in proximity and convert others to the "Payless" brand. The St. Louis operation of "'Hill Brothers Self Service'" stores were known for their bare bones minimalism and the slogan "two for five – man alive!", that is, women and children's shoes were two pair for five dollars.[9]

Payless bought Picway Shoes from the Kobacker department store chain in 1994.[10]

Key dates

1956: Pay-Less National is founded in Topeka, Kansas, by two cousins, Louis and Shaol Pozez, to open self-service stores selling budget footwear.

1962: The company goes public as Volume Distributors.

1967: The company is renamed Volume Shoe Corporation; an accelerated expansion program is launched.

1978: The Payless ShoeSource name is adopted for the bulk of the company's retail outlets.

1979: Volume Shoe is acquired by the May Department Stores Company.

1991: The company name is changed to Payless ShoeSource, Inc.

1996: May spins Payless off to shareholders, making it once again an independent, publicly traded firm.

1997: The mid-priced shoe chain Parade of Shoes is acquired from J. Baker, Inc.; the first Canadian Payless stores open.

1999: The firm launches e-commerce at payless.com; Payless opens locations on the sales floor inside Shopko discount stores, replacing J. Baker.

2000: Payless enters into a joint venture to expand into the Central American region.

2004: As part of a major restructuring, Payless announces that it will close down the Parade chain and close hundreds of Payless ShoeSource outlets.[11]

2012: Collective Brands Inc., which owns footwear brands such as Sperry Top-Sider and Keds as well as the retailer Payless ShoeSource, will be split in two by multiple buyers, Wolverine Worldwide, Blum Capital and Golden Gate Capital, in a purchase valued at $2 billion, including debt.[12] [13] [14]

2017: Payless Shoesource filed for Chapter 11 Bankruptcy and closed 400 stores nationwide.[15]

Expansion

Interior of a Payless ShoeSource in Groveton, Virginia

thumb|Payless ShoeSource in Fairview Mall

Payless ShoeSource in Promenade
A Payless ShoeSource store in Edmonton, Alberta

On June 27, 2006, Payless announced that it was launching a new logo created to represent a more stylish, upscale and contemporary company. This is the first rollout of stores in 2012 and beyond.[citation needed]

St. Lucia

In 2014, Payless opened its first store in St. Lucia at the Baywalk Mall in Gros-Islet. This is one of two Payless store located on the island of St. Lucia.

Australia

In 2013, Payless ShoesSource bought Payless Shoes Australia's full 150 stores, which has operated since 1980 out of administration. Previously, these two companies did not have any affiliation.[16]

On December 13, 2016, it was reported that all Payless shoe stores were to be closed in Australia with the loss of 730 jobs.[5][6]

Trinidad and Tobago

Payless Shoesource has a total of 21 stores across Trinidad and Tobago, having first opened its doors in 2001.

Barbados

In 2012 Payless expanded into the Barbados market by opening the first ten-employee store at Haggatt Hall, St. Michael. The group's CEO announced four more are also planned to open, and this will increase its local operations to 50 employees.

Jamaica

Payless Shoesource opened in Jamaica in January 2011 and today has a total of 12 stores on the island.

Payless in Santo Domingo, Dominican Republic.

Philippines

As of June 2015, Payless has 27 stores in the Philippines . 11 of them are located in the Metro Manila area and 16 are located in the provinces.[citation needed][17]

Indonesia, Singapore, and Malaysia

In April 2011, Payless launched its first store in Jakarta, Indonesia followed by one store in Kuala Lumpur and Singapore within the same year and under the same management. Payless Shoesource operates 19 stores throughout Indonesia currently.

Thailand

Central Marketing Group (CMG), a business unit of the Central Group, has signed a franchise agreement with Kansas-based Payless ShoeSource that will see outlets next year in Bangkok – Chonburi, making Thailand its 15th franchise country. It will also adopt Payless's new Hot Zone format and purchase products directly from the seasonal assortments, with slight adjustments for local needs.[18]

United Arab Emirates

It belongs to AlShaya group in the United Arab Emirates (UAE). It has opened different branches in Dubai Mall, Mirdif City Center and Sahara Center, and also in Bawadi Mall in Al-Ain City.

Collective Licensing International, LLC

Payless ShoeSource, operating as Collective Brands, Inc. formed a division called Collective Licensing International, LLC (CLI) in January 2004, which was based in Englewood, Colorado. CLI held and owned various clothing and sport brands, particularly "youth lifestyle brands" and board-sport brands such as Airwalk, Vision Street Wear, Sims, Lamar and LTD, World Snowboarding Championships, Sugarboards, Carve, genetic, Dukes, Rage, Ultra-Wheels, Hind, Spot Bilt and Skate Attack.[19] The primary purpose of the division was to develop brands and provide them with marketing and branding guidance in various markets.[20]

In 2010, CLI acquired Above The Rim from Reebok International for an undisclosed amount.

On July 14, 2014 Authentic Brands Group acquired some assets from Payless ShoeSource's division Collective Licensing International, LLC.

2017 bankruptcy

In April 2017 the company, struggling with the migration of retail shopping to e-commerce, filed for Chapter 11 bankruptcy.[21] It plans to immediately liquidate nearly 400 stores in the United States, Canada and Puerto Rico. Prior to the bankruptcy, heavily loaded with debt due to a private equity buy out, the company's credit rating was downgraded by Moody's. It has $100 million in loans that will come due in the next five years.[22] The company's bankruptcy announcement was part of a trend of retail closures in 2016–2017 known as the retail apocalypse.[23]

Payless emerged from bankruptcy court protection in August 2017. The company was the first among a group of retailers going through bankruptcy since 2016 to successfully complete the process of restructuring.[15]

References

  1. ↑ "Payless Inc: NYSE:PSS quotes & news – Google Finance". https://www.google.com/finance?cid=659279. Retrieved 9 June 2016. 
  2. ↑ 2.0 2.1 "Payless Holdings on the Forbes America's Largest Private Companies List". https://www.forbes.com/companies/payless-holdings/. Retrieved 9 June 2016. 
  3. ↑ "Find Articles". http://findarticles.com/p/articles/mi_m4PRN/is_2007_August_17/ai_n19452625.  [yes|permanent dead link|dead link}}]
  4. ↑ "PAYLESS SHOESOURCE ANNOUNCES CLOSE OF STRIDE RITE ACQUISITION AND HOLDING COMPANY NAME CHANGE TO COLLECTIVE BRANDS, INC. – Payless". Archived from the original on 4 May 2016. https://web.archive.org/web/20160504045423/http://www.paylesscorporate.com/payless-shoesource-announces-close-of-stride-rite-acquisition-and-holding-company-name-change-to-collective-brands-inc/. Retrieved 9 June 2016. 
  5. ↑ 5.0 5.1 5.2 Hawley, Brenna (May 1, 2012), "Payless ShoeSource owner agrees to $2B sale", Kansas City Business Journal: bizjournals.com, http://www.bizjournals.com/kansascity/news/2012/05/01/payless-shoesource-owner-agrees-to-2b.html, retrieved May 27, 2012 
  6. ↑ 6.0 6.1 "Owner of Payless, Stride Rite stores being sold". Archived from the original on May 2, 2012. https://archive.is/20120502103401/http://xfinity.comcast.net/articles/finance/20120501/US.Collective.Brands.Acquisition/. Retrieved March 17, 2017. 
  7. ↑ Steinberg, Haley (July 30, 2014). "Authentic Brands Group, LLC Acquires Collective Licensing, LP, Including Iconic Global Lifestyle Brand 'Airwalk,' From Payless Holdings LLC". http://www.prnewswire.com/news-releases/authentic-brands-group-llc-acquires-collective-licensing-lp-including-iconic-global-lifestyle-brand-airwalk-from-payless-holdings-llc-269258831.html. Retrieved March 16, 2017. 
  8. ↑ Gustafson, Krystina (2017-04-04). "Payless ShoeSource files for Chapter 11 bankruptcy". CNBC. https://www.cnbc.com/2017/04/04/payless-shoesource-files-for-chapter-11-bankruptcy.html. 
  9. ↑ Oltrogge, Sarah C. Images of America: East Village. Arcadia Publishing SC: February 2010. Page 43.
  10. ↑ Picway Shoe Stores to Go Out of Business after Takeover by Payless. (Originated from Akron Beacon Journal, Ohio). 29 August 1994. http://www.highbeam.com/doc/1G1-15770784.html. Retrieved 9 June 2016. 
  11. ↑ "History of Payless ShoeSource, Inc. – FundingUniverse". http://www.fundinguniverse.com/company-histories/payless-shoesource-inc-history/. Retrieved 9 June 2016. 
  12. ↑ "San Francisco's Golden Gate Capital, Blum Capital slip into Payless ShoeSource – San Francisco Business Times". http://www.bizjournals.com/sanfrancisco/news/2012/05/01/san-francisco-collective-brands-buyout.html. Retrieved 9 June 2016. 
  13. ↑ "Payless and Keds to be split in $1.32 billion buyout". 1 May 2012. https://www.reuters.com/article/us-collectivebrands-idUSBRE8400W820120501. Retrieved 9 June 2016. 
  14. ↑ Rusli, Evelyn M.. "Investor Group Carves Up Collective Brands". https://dealbook.nytimes.com/2012/05/01/investor-group-carves-up-collective-brands/?_r=0. Retrieved 9 June 2016. 
  15. ↑ 15.0 15.1 "Payless emerges from bankruptcy court protection after closing more than 673 stores" (in en). USA TODAY. https://www.usatoday.com/story/money/2017/08/10/payless-emerges-bankruptcy-court-protection-after-closing-more-than-673-stores/555790001/. 
  16. ↑ "Payless buys Payless Shoes from administration". 15 March 2013. http://www.abc.net.au/news/2013-03-15/payless-bought-out-of-admin-by-payless/4574924/. Retrieved 9 June 2016. 
  17. ↑ "Stores Specialists Inc. (SSI)". http://ssigroup.com.ph/brands. Retrieved 9 June 2016. 
  18. ↑ http://www.bangkokpost.com/business/retail/269054/cmg-walks-off-with-payless-franchise CMG walks off with Payless franchise Published: 3/12/2011
  19. ↑ "Collective Brands, Inc. Acquires Above The Rim Brand(R) From Reebok International". SEC Marketwire. January 15, 2010. https://www.sec.gov/Archives/edgar/data/1060232/000110262410000008/collectivebrandsinc.htm. Retrieved March 21, 2017. 
  20. ↑ "Company Overview of Collective Licensing International, LLC". https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=9205552. Retrieved March 16, 2017. 
  21. ↑ "Payless Restructuring Plan". http://www.paylessrestructure.com/. Retrieved April 22, 2017. 
  22. ↑ Gustafson, Krystina (April 4, 2017). "Payless ShoeSource files for Chapter 11 bankruptcy". https://www.cnbc.com/2017/04/04/payless-shoesource-files-for-chapter-11-bankruptcy.html. Retrieved April 4, 2017. 
  23. ↑ "Changing retail: Is everything you know about 'retail apocalypse' wrong?" (in en). USA TODAY. https://www.usatoday.com/story/money/business/2017/09/21/is-everything-you-know-about-the-retail-apocalypse-wrong/105809518/. 

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