The footwear retail chain grew its online sales by 17% year over year in 2016.

Footwear retailer Payless ShoeSource Inc. on Tuesday joined the growing list of retail chains to file for Chapter 11 bankruptcy protection so far this year.

Payless filed a voluntary Chapter 11 petition in U.S. Bankruptcy Court for the Eastern District of Missouri, citing assets of $500.1 million to $1.00 billion and liabilities of $1.10 billion to $10.00 billion. Its largest creditor is Morgan Stanley, to which it owes a $145 million unsecured claim.

The filing comes nearly two months after Bloomberg reported that Payless was in talks to close up to 1,000 of its stores due to financial struggles.

As part of the filing, Payless will close about 9% of its 4,400 stores, resulting in an unspecified number of job cuts. The retailer says it will otherwise conduct business as usual. To keep the business operating, Payless has secured $385 million in debtor-in-possession financing.

Payless, No. 364 in the soon-to-be-released Internet Retailer 2017 Top 1000, generated an Internet Retailer-estimated $72.0 million in online sales in 2016, up 17% from $61.5 million in 2014. In announcing its bankruptcy filing, Payless cites omnichannel expansion as one of its objectives to improve its financial situation, but it gives no details about how it will better align its online and in-store operations.


For more on why companies are buying financially troubled retailers and what is being done to breathe new life into those retailers, check out “Brand Revival” in the March issue of Internet Retailer magazine.