Payless ShoeSource, the discount shoe store, has filed for Chapter 11 bankruptcy protection.
"This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify," said Payless' CEO W. Paul Jones in a statement.
Payless plans to immediately close 400 stores in the U.S. and Puerto Rico and will also "aggressively manage" the rest of its real estate portfolio. That will mean closing additional stores and seeking to modify existing lease terms. The retailer currently has 4,400 stores in more than 30 countries.
In recent years, reports
Forbes, the retailer has suffered from flat and declining sales and a staggering amount of debt, as shoppers shun malls and instead opt for online or other discount stores.
Revenues slid 4% to $2.3 billion in the twelve months ending in October 2016, according to Moody's.
Payless listed estimated current liabilities from $1 billion to $10 billion, according to the bankruptcy filing. Meanwhile its assets range from $500 million to $1 billion.
Payless is based in Topeka, Kansas and filed for bankruptcy in the United States Bankruptcy Court for the Eastern District of Missouri on Tuesday.
HHGregg, Wet Seal, The Limited and RadioShack are among the retailers that also filed for bankruptcy this year.
This appears to be a sector problem and not an overall business decline.
Retailers have been particularily hurt by internet sales and at the same time squeezed by climing minimum wage rates.