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Payless Relaunches E-Commerce Business, Plans To Open 300-500 Stores

After emerging in January from its second stint in bankruptcy since 2017, Payless “is back,” the retailer trumpets on its newly launched e-Commerce site.

Payless, which has dropped the “ShoeSource” from its name, plans to open 300 to 500 freestanding stores across North America over the next five years, beginning with the opening of a prototype store this fall in Miami. In addition to a refreshed design, the stores will feature digital components such as smart mirrors, touchscreen wall panels and an augmented reality (AR) foot comparison chart.

“We saw an opportunity for the brand to relaunch into the U.S. market, providing our community with the affordable, value-driven products they’ve always searched for, now across multiple categories, at a time when value couldn’t be more critical,” said Jared Margolis, Payless CEO in a statement.

“We’re back and bringing more community responsibility, fashion-forward footwear, and on-trend partnerships,” Margolis added. Among the retailer’s new brands is the Kendall + Kylie line designed by Kendall and Kylie Jenner.

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On the community service front, Payless is launching a “Powered by Payless” initiative for the coming fall season to help communities affected by the pandemic. Through partnerships with schools across the country, it will provide students, teachers and their families with online connectivity technology, complimentary lunches and shoes.

When Payless ShoeSource filed for bankruptcy protection in February 2019, the company began two months of liquidation sales for its portfolio of approximately 2,500 North American locations and wound down its e-Commerce operations. The 790 owned and franchised Payless locations outside North America continued to operate as separate legal entities; their number has fallen slightly over the past 18 months, to 710.

Margolis, previously president of CAA-GBG’s Global Brand Management Group, took the helm of the company, now known as Payless Worldwide, in October 2019.

In an interview with The Wall Street Journal, Margolis said “starting from scratch puts us in a good position.” The company will focus on providing an omnichannel experience and lean into e-Commerce, Margolis said, predicting that approximately 40% of sales will come from digital channels once stores open, as compared to just 6% for its predecessor.

Previous Payless enterprises were bogged down by the costs of running thousands of stores as consumers increasingly shopped online. Margolis plans to rein in costs with such strategies as negotiating leases that use a percentage of store revenue to pay a share of the rent rather than a fixed payment.

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