Payless ShoeSource is filing for bankruptcy protection and plans to close 400 of its 4,400 stores and work to aggressively manage the remaining real estate lease portfolio either by modifying terms, or evaluating closures of additional locations.

The company has secured debtor-in-possession financing to continue operations and plans to restructure its debt load and refocus its business on omnichannel expansion; product and inventory initiatives; and international expansion in Latin America and elsewhere.

W. Paul Jones, Payless Chief Executive Officer, commented, "This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify. We will build a stronger Payless for our customers, vendors and suppliers, associates, business partners and other stakeholders through this process. While we have had to make many tough choices, we appreciate the substantial support we have received from our lenders, who share our belief that we have a unique opportunity to enable Payless -- the iconic American footwear retailer with one of the best-recognized global brands -- to remain the go-to shoe store for customers in America and around the globe." 

"We are confident that this process will also enable us to leverage Payless's existing strengths to succeed," continued Mr. Jones. "These strengths include our ability to produce significant free cash flow and, even last year, flat EBITDA despite unprecedented challenges and in contrast to many retailers; our portfolio of strong proprietary brands, along with unique licensing agreements with premier brands and partners; our best-in-class design and sourcing capabilities that enable the Company to offer customers high quality products at a significant discount to peers; our strong and growing Latin American business, and a lean and scalable franchise model for other markets."