Business

Payless ShoeSource in Arroyo Grande to close

Shoe chain Payless ShoeSource has filed for Chapter 11 bankruptcy protection, becoming the latest retailer to succumb to increasing competition from online rivals like Amazon. It is closing nearly 400 locations nationwide, and almost 50 of those are in California.
Shoe chain Payless ShoeSource has filed for Chapter 11 bankruptcy protection, becoming the latest retailer to succumb to increasing competition from online rivals like Amazon. It is closing nearly 400 locations nationwide, and almost 50 of those are in California. AP

The Payless shoe store in the Five Cities Center in Arroyo Grande is closing, the company announced Wednesday.

Company officials are not sure exactly when the West Branch Street location will close, said Meghan Spreer, a spokeswoman for Payless ShoeSource. A third party, which Spreer did not know the name of, will oversee the liquidation process for each store that’s closing. That oversight will include determining discounts and promotions at the stores, she said.

Spreer declined to provide the number of workers at the Arroyo Grande store.

While the South County store will close, Payless locations in Paso Robles, San Luis Obispo and Santa Maria will remain open.

The Topeka-based retailer said Tuesday that it would immediately close nearly 400 Payless ShoeSource stores nationwide after filing for Chapter 11 bankruptcy reorganization, which allows it to continue operating while working out a plan to repay debt. On Wednesday, the retailer announced which stores would be affected. Forty-nine of the closures are in California, according to a news release.

The shoe chain is the latest retailer to succumb to increasing competition from online rivals such as Amazon. Shoppers are increasingly shifting their buying online or going to discount stores like T.J. Maxx to grab deals on designer brands. That shift has hurt traditional retailers, even low-price outlets like Payless.

Moody’s Investor Service said earlier this year that the number of “distressed” retailers — those with cash problems and lots of debt that are facing strong competition — is at the highest rate since 2009. It named Payless as one of the retailers.

Payless has more than 4,400 stores in more than 30 countries. It was founded in 1956.

The Associated Press contributed to this report.

Megan Henney: 805-781-7915, @megan_henney

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