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Payless emerges from bankruptcy

(WIBW)
Published: Aug. 10, 2017 at 11:10 AM CDT
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Payless ShoeSource has officially emerged from bankruptcy.

On Thursday, the Topeka-based shoe retailer announced its financial restructuring was complete and they plan to make leadership changes as part of their reorganization efforts.

“We have accomplished our goals of strengthening our balance sheet and restructuring our debt load, positioning Payless to create substantial value for our stakeholders and achieve long-term success,” said Payless' CEO Paul Jones.

As part of their plan to revamp the company, Jones will step down and the post-bankruptcy Board of Directors will begin its search for a new Chief Executive Officer. In the interim, an Executive Committee has been set up which includes Chief Financial Officer, Michael Schwindle, Payless’ Chief Operating Officer, Mike Vitelli, and headed by Martin R. Wade, III, Chairman of Payless’ post-emergence Board of Directors and interim Chief Executive Officer.

"Our new owners believe wholeheartedly in the future of Payless, and I am confident that they will identify a new leader who will complement our outstanding and deeply committed management team, while sparking new ideas and approaches,” Jones continued.

Earlier this month, a federal bankruptcy judge in Missouri approved their plan to get out of bankruptcy.

The order was issued July 26. It allows Payless to proceed with a reorganization plan that includes closing around 700 stores. It also reduces the company's debt from $850 million to just over $400 million.

While court documents show most creditors supported the reorganization proposal, a separate order entered August 2 allows Payless to continue negotiating settlements through Oct. 1, 2017.

Payless did not respond to a request for comment Wednesday night, but

a necessary step to build a stronger company. They said the decision was sparked by continued challenges of the retail environment.

Payless has about 800 employees at its Topeka world headquarters. About 150 workers have been laid off from the office since January.