With more than 60 years of existence the specialty footwear retailer pointed significant challenges due to increasing competition from online retailers as one of the reasons to restructure its business.

The company will use Chapter 11 to restructure its debt, re-think its store footprint and relaunch the business in the strongest possible way. The company aims to reduce its debt by roughly 50%, lower the amount of interest in repayments and line up funds.

“This is a difficult but necessary decision driven by the continued challenges of the retail environment, which will only intensify”, stated Paul Jones, CEO, Payless.

Payless, employing over 22 000 people in over 4 000 stores across 30 different countries, a list of other fashion retailers which recently announced financial difficulties, including K-Mart, Sears, Aerospostale, American Apparel and JC Penney.