Payless ShoeSource has emerged from voluntary Chapter 11 with a new executive team led by Jared Margolis, former president of CAA-GBG, a licensing agency and joint venture between Global Brands Group and Creative Artists Agency.
The 64-year-old retailer filed for bankruptcy protection in February and subsequently shuttered its 2,500 stores in the U.S. The filing came less than two years after an initial petition in April of 2017. Payless closed 700 stores on its first trip to bankruptcy court, emerging after four months.
Payless exited its first brush with bankruptcy with too much debt and too many stores, executives said at the time. Those challenges, along with a brutally competitive retail environment, sent the company to court a second time.
Justo Fuentes was named chief executive officer of Payless Latin America, the company’s largest business unit. He was the president of BATA Latin America, where he oversaw 1,000 stores, e-commerce, catalogue, wholesale distribution and manufacturing. Payless Latin America operates more than 710 stores in 30-plus countries in Latin America, Southeast Asia and the Middle East. Stores in the three territories are owned and operated by Payless and its franchisees.
“We intend to leverage Payless’ existing infrastructure, which is best in class and already includes product design and development, distribution, marketing and a strong relationship with major footwear manufacturers,” said Margolis, adding that the capabilities will allow the new Payless “to be nimble, innovative and fast track our biggest growth opportunity, which is the United States.
“We’ll implement a new comprehensive strategic plan to strengthen our relationship with vendors and suppliers, support our global franchise partners and deepen the trust of our customers,” Margolis said, adding that Payless, with a strengthened balance sheet and clean financial outlook, is poised to launch a new strategic phase. “Payless stands for design, quality and value and we plan to reinvigorate that proposition for our customers all over the world.”
Fuentes said the Latin American unit in the past year implemented new strategies to increase market share and grow the store fleet in the region. “We’re going to build on this even further,” he said. “The plan also includes a strong digital component to bring an omnichannel approach to the Latin market.”
Payless, which offers footwear for men, women and children at value price points, plans to execute “high-profile collaborations with individuals and brands to create exclusive products at compelling prices,” the company said. It’s also in the process of evaluating new technologies to streamline and optimize the customer experience, an approach it will apply across all of its distribution channels, worldwide.
Payless’ international footprint sold about 25 million pairs of shoes in the last 12 months. Its active database boasts 11 million customers who purchased products in the last year.