Discount shoe retailer Payless ShoeSource could close as many as 1,000 stores as it seeks to cut costs. The company has hired a financial advisor to help it consider filing for bankruptcy protection to restructure its debts.
Leveraged buyout firms Golden Gate Capital and Blum Capital Partners bought the chain in 2012 as part of a split of publicly traded Collective Brands Inc. Payless currently operates more than 4,400 stores in 30 countries.
Moody's downgraded the retailer's credit rating this month, saying it might have a hard time refinancing a $520 million 1st lien term loan due in 2021 and $145 million 2nd lien term loan due in 2022.
Payless has about $55 million in cash on hand to fund continuing operations, Moody's says.