To increase profitability and focus on its core business, shoe retailer Payless ShoeSource is kicking out its higher-priced Parade stores by the end of the year. Parade has 181 stores in major cities such as New York, Philadelphia and Miami. Payless said it would eliminate Parade from its inventory by the end of fiscal 2004, ending Jan. 31.
It is still uncertain if the company will sell the stores or close them. Payless did not reply to repeated calls for information.
“The decision to exit Parade was based on the conclusion that its contribution to our core business strategy is diminishing,” said Chairman and CEO Steven Douglass in a statement. “Exiting from Parade will enable us to sharpen our focus on executing our core business strategy: to be the merchandise authority on value-price footwear.”
The company also plans to close all 32 Payless ShoeSource stores in Peru and Chile. It also will close approximately 260 stores due to weaker sales performance in the second quarter of 2004.
The company had already made plans to close or relocate an additional 230 stores by the end of fiscal end of 2004. The cost for terminating or relocating all these stores will be between $40 million to $60 million.
The company is also expected to add about 300 new stores to its portfolio by year's end.
American Research Group President Britt Beemer says the company's formula has been to provide inexpensive shoes in numerous locations, with deals every week. Beemer says the formula has been successful and the company's only competitor in back-to-school shoes is Wal-Mart.
“When I do my back-to-school research and I ask parents who they went to for back-to-school apparel, Payless always comes up in a big way,” said Beemer.