Payless ShoeSource heading for a second bankruptcy, likely liquidation

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TOPEKA — Payless ShoeSource appears headed for a second bankruptcy which could lead to the closure of all of its retail stores including a location in Manhattan.

Multiple media outlets are reporting that the struggling shoe store, founded in Topeka, is heading back to bankruptcy court. It would be the second time in as many years. According to Reuters, Payless had been trying unsuccessfully to find a buyer and when it became apparent no deal could be reached, the store opted for liquidation.

In 2017, Payless restructured its business with hopes it could survive its financial woes. It exited bankruptcy 18 months ago with roughly $400 million in loans, after slashing its debt from over $800 million according to the Reuters report.

The Wall Street Journal cited sources close to the issue Friday that Payless will close all of its 2,100 stores. It operates one location inside Manhattan Town Center.

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