Cash-strapped Consumers Head Online to Zappos and Others Forcing Payless to Close 1,000 Stores
Not much to say here other than Payless is feeling the same heat that is forcing many brick & mortar retailers to reduce their footprint to stem the red ink on their income statements. Given the rise of services like Zappos and other digital shoe commerce platforms, including booming Direct To Consumer sales at Nike and Under Armour (UA), this comes as little surprise and adds to our Transformation of the Mall thesis. To us, Payless closing 1,000 locations mean it has hit the headwind that is the intersection of our Connected Society and Cash-strapped Consumer investing themes. Odds are high it’s not alone
Payless, the ubiquitous discount shoe retailer with more than 4,400 stores in 30 countries, is reportedly looking to cut back on its ubiquity. Just like just about every other retailer in your local mall, especially the ones that sell clothing, the company has too many stores and too much debt.In general, it’s a bad time to be mall retailer, especially one in the apparel and accessories business. While the last year has seen teen-focused brands like Wet Seal, Aeropostale, and American Apparel collapse, older-skewing brands like The Limited haven’t been spared, either.
Payless sells shoes for people of all ages and both sexes, but enough consumers have shifted to buying everything online, even shoes, that more than 4,000 small discount shoe stores in malls and strip malls are no longer necessary.
Other popular mall retailers that investment analysts have identified as being potentially in trouble include Claire’s, Gymboree, J. Crew, and Rue21.
Source: Report: Payless Looking To Reduce Its Footprint, Close 1,000 Stores – Consumerist
