TO CLOSE

The discount shoe retailer Payless ShoeSource is about to close all of its stores when its file goes bankrupt later this month. Mercer Morrison of Veuer has history.
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Payless ShoeSource on Monday requested the protection of its Chapter 11 bankruptcy, with the intention of closing all its stores in the United States and Canada.

This highly anticipated move marks the second largest bankruptcy filing of the retailer based in Topeka, Kansas, in about as many years.

The first time, the company has reached an agreement to reduce debt accumulated through a private equity agreement, to close distressed stores and to come out of bankruptcy in 2017 with a chance to survive.

This time, the company goes bankrupt and plans to close some 2,500 sites in the United States and Canada. The company has already stopped online sales.

Liquidation sales were to begin as early as Sunday. Some stores will be closed by the end of March, while "many" will remain open until the end of May, Payless said Monday night.

"The challenges retailers are facing today are well documented, and unfortunately, Payless has emerged from its previous reorganization, poorly equipped to survive in the context of retail," said Stephen Marotta, head of restructuring of Payless, in a statement. Remaining debt, too large store footprint and consolidation of systems and overhead costs of the company not yet realized. "

Retailer should honor gift cards and in-store credit until March 11th.

Payless sites located in approximately three dozen other countries, including 420 company-owned stores and 370 international franchise stores, will remain open.

The bankruptcy of the company comes as many challenges arise for retailers of shopping centers, including the decline in pedestrian traffic, digital competition and the changing tastes of buyers.

The archive photo taken in 2014 shows buyers in a Payless ShoeSource store located at the Superstition Springs Center in Mesa, Arizona. (Photo11: Dominic Valente / The Republic, Dominic Valente / The Republic, Do)

Payless, which had closed about 900 stores during its first bankruptcy, had more than 3,500 left in 40 countries and about 18,000 employees in September.

The company's bankruptcy petition mentioned debts and assets between $ 500 million and $ 1 billion.

Closure of stores: Payless ShoeSource Closes 2,100 US Stores and Starts Sunday Liquidation Sales

Payless liquidation sale price: What you need to know about store closing sales

Payless has listed several Chinese companies, including shoe suppliers, among its major unsecured creditors.

Founded in 1956, Payless has contributed to innovation in the retail strategy of allowing consumers to choose their own purchasing choices.

But in recent years, the channel had a limited digital presence, too high prices over time and agile physical competition.

After its first bankruptcy, the company had planned to cut prices and help other retailers manage their shoe stocks or sales while adopting the principle of treasure hunts from successful retailers such as TJ Maxx and Marshalls.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.

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