Topeka-based Payless Shoesource has filed for bankruptcy

Grim days for retail brick-and-mortar chains. Many of the old giants — Sears, Macy’s, KMart, Kohl’s — are closing stores across the country. Gordmans filed for bankruptcy in March. Today, Payless Shoesource, the budget footwear chain founded in Topeka and headquartered there since 1956, made its debut in bankruptcy court.

According to the bankruptcy filing, Payless has somewhere between $1 billion and $10 billion in liabilities against less than $1 billion in assets. (Payless was once a publicly traded company, but it went private in 2012.) The company’s largest creditor is Morgan Stanley, to which it owes $145 million. It seeks to reorganize by immediately closing 400 stores and reducing “its debt load by almost 50%, materially lower its annual cash interest costs, access significant additional capital and provide a path to an expedited emergence from Chapter 11 with a sustainable capital structure for the future,” according to a release. 

“This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify,” Payless CEO Paul Jones said in the release. 

Payless laid off 167 corporate employees earlier this year, 110 of whom were based in Top City. It told the trade publication Footwear News last year that it planned to close between 350 and 500 stores within the next three years while it focused on pivoting to larger “superstores” like the one at Oak Park Mall. 

The company’s official release on the bankruptcy can be found here.