So much for the idea that being value-oriented is enough to carry a retailer through today's turbulent market. Payless Shoes has been known for selling affordable footwear for years (quality is another matter, even little kids know that Payless shoes are "made of paper"). Even so, the shoes are often cheap enough to justify a purchase, however briefly you'll wear them.
That's why it comes as somewhat of a surprise that Payless' parent company, Collective Brands Inc., announced it will close 475 stores over the next three years. The closures will affect both Payless and Collective's other brand, Stride Rite. Collective reported a decline in same-store sales for the two brands in the second quarter.
All the same, since Collective will now be considering strategic alternatives (i.e. a buyout of the firm), this might turn out to be not such a bad thing for Payless. The chain has a recognizable name and it does offer value in troubled economic times, so an experienced retail operator might be able to help it overcome its challenges. It will be interesting to see if the chain gets bought out, and if so if it will go into the hands of private equity or to another retail operator.