Payless Headed for Bankruptcy in NYC
Payless Headed for Bankruptcy in NYC
All across the nation, the retail chain Payless ShoeSource is failing. There are over a dozen Payless locations in NYC, and news was recently revealed that the company plans to file bankruptcy within the month. In addition, more than 500 stores will be shut down, and the company will be going through a major overhaul.
A Bad Year for Retail
Physical retail locations have had it rough, but no more so than last year. With more and more business moving online, keeping the lights on in brick and mortar stores is getting to be the most unprofitable part of owning a business. A large number of major retailers declared bankruptcy in the last year, and then restructured towards a more Internet-based service.
Payless seems to be following that pattern. After dismal physical sales and rising online sales, the company has decided to seek better opportunity where the money is. But first, they have to get rid of the debts they’ve incurred opening more than 4,000 Payless stores around the globe.
Why Bankruptcy Could Be Smart for Payless
Opening a new store takes a lot of capital. Most Payless locations are in leased buildings or stores inside malls, meaning they have monthly debts that eat into huge portions of their bottom line. By declaring bankruptcy, Payless will be able to start pouring their profits into creating a good online service, which is where most of their revenue is likely coming from at this point.
Closing down locations is another step towards this, as they’ll lose the need to pay those bills. Payless originally said they’d closed down as many as 1,000 stores – 25% of their entire location base. The number has changed a few times since then.
Bankruptcy Can Be a Savvy Decision
Bankruptcy isn’t always a last resort for desperate people trying to get out from under debt. Some businesses, like Payless, can use bankruptcy to reinvent themselves. A clean break in any other way just wouldn’t be possible. The benefits of choosing bankruptcy include the ability to simply walk away from anything and everything that is currently the norm, and embrace something totally new.
You Can Use Bankruptcy in a Savvy Way, Too
Just like Payless, you also have the ability to weigh the pros and cons of bankruptcy and choose to file even if you haven’t felt like you “needed” to. Bankruptcy can allow you a fresh slate to start over with; give you more control over your monthly budget; force you to think harder about the debts you incur; get out from under upside down loans; and more. You’ll also be immediately shielded from annoying creditors with the automatic stay, which makes it illegal for creditors to call you, send you letters, email, or contact you in any way after the bankruptcy has been filed.
And as you can see, Payless went from deciding to close 1,000 stores, to now suggesting they’ll close about half that number. Payless knows that a bankruptcy doesn’t mean you have to give up your assets. You will be able to keep your home, vehicle, and other important assets even if you file bankruptcy.
Contact Experienced Legal Counsel Today
Bankruptcy can be a very complicated legal procedure if not done correctly, especially if you have a lot of debt or a complicated income stream. That’s why we are here to help. We have experience in dealing with every type of bankruptcy, and can walk you through how to use the system in a savvy business-minded way. Call our office at 212-244-2882 for a consultation and estimate.