Entrepreneurs Louis and Shaol Pozez could not have anticipated 63 years ago that their discount shoe business would be taken down by a network of computers.
This isn’t a story from the rejected piles of Terminator franchise spinoffs; this is a reality.
The Pozez’s conception, which grew into Payless ShoeSource brick-and-mortar stores across the U.S. and Canada, is officially shuttering. The company’s disregard for advancing online sales, in addition to highly leveraged assets, proved fatal.
Established by the Pozez cousins in 1956, Payless became a public company in 1961, eventually merging with The May Department Stores Company in 1979.
As recently as 2017, the company had acquired the Stride Rite Corporation, a well-known shoe manufacturer specializing in brands such as Keds, Hush Puppies, Saucony and Merrell.
There were an estimated 4,500 Payless stores globally at the height of its success. Annual sales for 2011 were reportedly upwards of $3.4 billion.
How the laces unraveled
The story of the demise of Payless is not unique. Missing the boat on the online market was just one component of its downfall.
Drowning in debt, the company first filed for bankruptcy in 2017.
Payless emerged with a reduced store footprint and a plan to pay back approximately $400 million in outstanding loans, down from an estimated $800 million prior to the bankruptcy filing.
The company made deep cuts to management, positions which were never refilled. Those decisions eventually hindered the relaunch of the company’s e-commerce site.
This would prove to be final nail in the Payless coffin. On Feb. 14, Payless announced it was again filing for bankruptcy.
All 2,100 stores in the U.S. will close, in addition to 248 stores in Canada. The 790 remaining stores in Latin America and other international locations are unaffected by the most recent announcement.
Will Payless be missed?
I can’t say that, on a personal level, as a consumer I’m highly disturbed by all this.
I was not part of the Payless target audience. I figured out a few years ago that you pay for what you get; and Payless shoes were often inferior and not worth the price.
However, I was astonished to discover about six months ago the company’s website doesn’t facilitate online sales. A visit to their website categorizes and lists their products, but instead of offering a buy option, you’re directed to find a store nearby.
It wasn’t too long after my online search that I heard of a store closing in a market which would absolutely be in their wheelhouse.
I guess you could say, there were signs.