Restructuring Information

Letter to our family of Payless customers

To Our Valued Customers:

We would like to express our deep gratitude for your loyalty and for your business over the years. Payless was founded in Topeka, Kansas in 1956 and has been selling quality, on trend footwear and accessories at affordable prices for over six decades. We have always prided ourselves on our leading customer service and fostering an engaging shopping experience for our customers.

Over the years, we have had highs and lows amidst significant operational and market challenges. Despite our best efforts to address the rapidly changing retail environment, we – like many other retailers – have been forced to face very difficult choices. The desire to maintain our brand, and to continue serving our global customer base, first led us to file for Chapter 11 bankruptcy protection in April 2017. Unfortunately, we emerged from the prior reorganization ill-equipped to survive in today’s retail environment, with too much remaining debt, too large a store footprint and a yet-to-be realized systems and corporate overhead structure consolidation.

While we have worked diligently with our suppliers and other partners to best position Payless for the future, we have been unable to operate our North American businesses on a sustainable basis. After careful deliberation, we have decided to voluntarily file for Chapter 11 protection in the U.S Bankruptcy Court for the Eastern District of Missouri and to commence similar proceedings in Canada pursuant to the Companies' Creditors Arrangement Act (the “CCAA”) in the Ontario Superior Court of Justice (Commercial List).

As part of the process, we have made the difficult decision to close our stores in the U.S., Puerto Rico and Canada, and we have wound down our e-commerce site. Stores across North America remain open at this time, and we are conducting liquidation sales that will continue until at least the end of March, with most continuing through the end of May.

We have sought authorization from both Courts to continue to honor customer gift cards and store credit until March 11, 2019, and to continue to allow returns and exchanges of applicable non-final sale purchases made prior to February 17, 2019, until March 1, 2019. We have discontinued our Rewards program and terminated all outstanding merchandise coupons in North America, effective immediately.

It is important to note that Payless stores throughout Latin America, as well as our international franchisee stores, will continue to operate business as usual in every respect. We expect continued profitable growth in our Latin American and international operations.

We would like to extend our appreciation to our hard-working, dedicated Associates who have worked tirelessly to deliver an exceptional service to our customers.

Again, our sincere gratitude goes out to our customers for their loyalty and support over the years.