Family footwear giant Payless ShoeSource has filed for bankruptcy and will immediately close 400 stores in the U.S. and Puerto Rico, the company announced Tuesday.
The chain, which has about 4,400 stores in more than 30 countries, will close 11 stores in Pennsylvania. That includes the store on Millersville Pike in Rockvale Square in Lancaster Township.
There are more than a dozen Payless stores across Central Pennsylvania.
Payless, which was rumored to be seeking Chapter 11 bankruptcy protection in recent weeks, has less than $1 billion in assets but up to $10 billion in liabilities, according to its bankruptcy filing in the U.S. Bankruptcy Court for the Eastern District of Missouri.
The company said it will work to “aggressively manage the remaining” stores by modifying lease terms or closing additional locations. Previous reports suggested the chain might close up to 1,000 stores in a restructuring plan with its lenders.
Payless is owned by private equity firms Golden Gate Capital and Blum Capital Partners.
“This is a difficult but necessary decision driven by the continued challenges of the retail environment, which will only intensify,” said Paul Jones, the chain’s CEO. “We are confident that this process will also enable us to leverage Payless’s existing strengths to succeed.”
The discount shoe chain is the latest big name to announce store closures this year as the mix of tenants in many traditional shopping malls continues to change in the face of growing online competition. J.C. Penney and Macy’s have been shrinking their retail footprint, while iconic names like Sears and RadioShack are at risk of closing for good.