Shoe retailer Payless has filed for bankruptcy on Tuesday, closing more than 400 stores across the U.S. and Puerto Rico immediately. Closing these stores is costing many people their jobs, making other employees still employed by Payless fear for their jobs!
Before Payless filed for bankruptcy, they were in discussion with their lenders for many months. The restructuring plan at the time mentioned closing as many as 1,000 stores, which makes the current closing of 400 stores pale in comparison.
More Stores Likely to Close
Even though only 400 stores are closing immediately, it is likely that Payless will close more stores in the future, given the original restructuring plan that was leaked.
Payless currently has 4400 stores in more than 30 countries. The shoe chain is responsible for more than 22,000 jobs. Therefore, closing any additional stores could be devastating for many people. In the meantime, the company said to aggressively maintain the remaining stores, but it is certainly no guarantee that other stores aren’t going to close.
Other Stores Cutting Back
Unfortunately, Payless is not the only retail store that has made serious cutbacks over the past couple of months. An increasingly large number of retail stores appear to be struggling; this includes well-known stores such as JCPenney, Macy’s, Sears and Kmart.
High-end retailers such as Sears and Macy’s have announced closures earlier in the year, but less-known retailers are also struggling. Other stores that have announced closures include Crocs, BCBG, Abercrombie & Fitch and Guess.
Bebe Closing All Its Stores
Some retailers are closing down all their physical stores and start to focus on online retail instead. Bebe is one of those stores, who decided to shut down a whopping 170 stores to focus on online sales. By focussing on online sales, Bebe hopes to save on overhead costs and target consumers who limit themselves to online shopping.
Stores Shutting Down Completely
There are some stores who can’t salvage everything and must shut down completely. One retailer that was forced to shut down completely recently is The Limited, who forcibly shut down 250 stores.
The Limited was a retailer that mainly focused on women’s apparel. Even though most people knew that the company was struggling, nobody saw a complete bankruptcy coming. With the closing of 250 stores, more than 4,000 people are set to lose their job.
Representatives from The Limited claim that the bankruptcy of the company can be attributed to a big drop in sales and a shift in consumer behavior. The company also claimed to deal with too much competition, leaving them unable to turn a profit.
The claims of The Limited seem to apply for companies across the board, especially when you look at companies such as Chico’s, Ann Taylor, and other women’s apparel stores who are experiencing a big drop in sales.
The Uncertain Future
The future is uncertain with many retailers struggling. However, there could be a silver lining, because many stores start building their stores online; this could mean jobs for website designers, programmers and logistics staff. Still, the total number of people needed for online stores does not compare to a physical store, so many jobs will be lost in the future. Therefore, it could be wise to start schooling yourself for an online future.