Can Payless avoid past mistakes with its new comeback effort?
Payless has been in and out of bankruptcy for years, having filed for court protection in 2017 and again last year when it announced it was closing all its stores in the U.S. and its e-commerce site.
Having emerged from Chapter 11 in January, the discount shoe seller said it planned to focus its immediate efforts on foreign markets, but that it was planning an American comeback as the country, according to CEO Jared Margolis, represented the “biggest growth opportunity” for Payless going forward.
Now, WWD reports that Mr. Margolis and his team are ready to have another go at getting it right in the USA with a relaunched website and new store prototype.
The new Payless will be decidedly smaller. The retailer, which once operated thousands of stores across the U.S., will cap its physical locations at between 400 and 500, with e-commerce expected to carry more of the selling load. Mr. Margolis told WWD that he expects online to “conservatively” account for somewhere between 30 and 40 percent of total revenues within five years.
Payless will open its first prototype in the Miami area, close to company headquarters. Mr. Margolis said the retailer plans to open 30 to 45 stores in Texas and along the U.S. border with Mexico by the end of next year.
The chain plans to make use of technology to assist in its self-service selling efforts. Touchscreens will enable shoppers to look for products not available in-store and place orders for delivery. The retailer will also roll out an app that allows shoppers to use their phones to help determine shoe size for in-store or online purchases.
Payless’ Margolis expressed optimism about the chain’s prospects, vowing not to repeat the mistakes of the past. The retailer will avoid reopening stores in markets that underperformed before and plans to outsource many functions it previously did in-house to keep costs down and remain nimble in the face of market challenges.
Keeping to its discount roots, Payless will sell shoes for an average of $19.99, with the highest price at $49.99. The company will seek to partner with influencers, celebrities and designers to create collections that will create excitement and drive traffic.
WWD reports that Payless plans to make use of its database of 70 million former customers as part of its initial marketing efforts. The retailer is working on launching social media programs in Houston, Miami, New York and Los Angeles in the fall.
- Payless is back (video) – Payless
- Payless Shoes Is Back in Business – WWD
- Shoe Seller Payless Attempts a Comeback – The Wall Street Journal
- How a Pandemic and a Recession Created the Climate for a Payless Comeback – Footwear News
- Remember Payless? Shoe seller is back and opening its first US store in November – CNN
- Payless ShoeSource emerges from bankruptcy — again – CNBC
- How Private Equity Buried Payless – The New York Times
- As Payless wades through bankruptcy again, creditors say hedge fund may be to blame – USA Today
- Where did Payless go wrong? – RetailWire
DISCUSSION QUESTIONS: Does Payless’ new plan to remake its U.S. business sound like it could work? What do you see as the biggest challenges and opportunities for Payless as it restarts?