We believe Payless ShoeSource, Inc. will restructure and will be the first large retailer to file for bankruptcy in 2017 after discovering the WHOIS record for paylessrestructuring.com. As a reminder, we search new WHOIS registrations for these new websites.


Payless has been struggling with its debt load since being taken private in 2012 (and doing a dividend recap) as mall traffic continues to decline and the company faces increased competition from other chains such as DSW and TJ Maxx:

Blum, Golden Gate and Wolverine World Wide Inc (WWW.N) took Payless’ former parent, Collective Brands Inc., private in 2012 in a deal valued at about $2 billion. Blum and Golden Gate kept Payless, while Wolverwine took over a group in Collective that included the Sperry Top-Sider, Stride Rite and Keds brands. [1]

Capital Structure:

$520MM 1st lien TL due 2021

$145MM 2nd lien TL due 2022

$300mm ABL facility (partially drawn) due 2019

In early 2016, Moodys Downgraded Payless on liquidity and leverage concerns. Payless has recently announced plans to close up to 1000 stores, and has been working with restructuring advisors.

As of mid February 2017, the 1st lien TL was quoted around 50 and the 2nd lien TL was quoted around 16. We imagine Payless will required a DIP for operational capital and the 2nd lien TL will recover 0.

[1] http://www.reuters.com/article/us-payless-debtrestructuring-idUSKBN14X2J1