Experts: LI workers will be hurt by the closure of Payless

Kathie Heloskie rushed there as soon as she could, after hearing the news.

Payless ShoeSource is closing all of its stores in North America, leaving the Seaford resident unable to find affordable and comfortable work shoes, she said Tuesday afternoon standing in front of the office. location of the chain in the North Massapequa Mall.

"I work five days a week, eight hours a day, sometimes longer. These are the best shoes for me, "said Heloskie, 67, a front desk attendant at a hotel, while she was holding a bag containing two new pairs of Dexflex Comfort shoes that she had purchased from Payless .

The 30 stores of the Long Island discount shoe retailer will be part of the 2,500 stores in North America closed by the chain beginning in March, following the filing by Payless Holdings LLC of Chapter 11 bankruptcy protection in the US court. the American bankruptcy of the eastern district of Missouri.

Experts expect the losses on Long Island to have a bigger impact on jobs than on long-term store vacancy rates or shoe-buying options.

"The shoes will be bought elsewhere, it's easy. But the jobs lost to be replaced – not so easy. The lost tax revenues are minimal because the sale of shoes and the tax on it will be transferred to other stores, "said Marshall Cohen, senior advisor to NPD Group Inc., a research firm of market based in Port Washington.

"So all in all, [a] big loss for LI? With regard to jobs, yes. In terms of revenue, no, except for e-commerce activities that replace store operations, "added Cohen.

Founded in 1956 in Topeka, Kansas, Payless Holdings employs approximately 13,700 people in the United States, Puerto Rico, the US Virgin Islands, and Guam, as well as about 2,400 people in Canada, according to the ranking of this group. week. Only the chain stores in the United States, Puerto Rico and Canada are closing. The vast majority of payless store employees work part-time.

Payless Holdings declined to comment on the number of employees, but Mr. Cohen said the stores had an average of five employees per location.

Kimco Realty Corp., based in New Hyde Park, has 39 Payless stores in its tenant portfolio in several states, including four local stores at the North Massapequa Mall, Centereach Mall, Bridgehampton Commons, and a small mall located on Merrick Road in Bellmore, said Dave Bujnicki, senior vice president of investor relations and strategy for Kimco.

When Payless had already declared bankruptcy in April 2017, the company had modified its rents. So the chain is paying Kimco just under $ 21 per square foot for its stores, while the average rent for small stores is $ 28, Bujnicki said.

"They are about 25 to 30% below the market average. And with the strong demand for small shops [locations] health and well-being, restaurants … we are delighted to be able to re-let these spaces, "he said.

In the fourth quarter of 2018, the Long Island shopping center vacancy rate of between 10,000 and 350,000 square feet was 7.5%, the highest level recorded since the second quarter of 2000, according to Economic analyst Cody Bond of Reis Inc., a real estate information company based in Manhattan.

But most of Long Island's Payless stores are in busy, high-demand shopping centers, including Garden City Park, Expressway Plaza in Farmingville, and Southport in Shirley, said Kenneth R. Schuckman, president of Schuckman Realty Inc. in Lake Success. This company markets Expressway Plaza for rental.

Shopping centers, such as Green Acres in Valley Stream and Sunvet Mall in Holbrook, will have a harder time placing new tenants in their Payless stores, as they have lost many of the pillar stores behind the traffic. have higher occupancy costs. I said.

The reorganization of the Payless bankruptcy in 2017 is not effective enough to prevent a closure, said Stephen Marotta, appointed in January as director of the restructuring of Payless, in a statement.

"Previous proceedings left the company with too much debt, too much store footprint, and system and overhead consolidation not yet done," he said.