Newspaper article The Topeka Capital-Journal

Payless: Reduction in Assets Beneficial

Newspaper article The Topeka Capital-Journal

Payless: Reduction in Assets Beneficial

Article excerpt

"We are still very much in business."

Those words from Payless ShoeSource chief financial officer Michael Schwindle affirm the strong and decided approach the Topeka-based company is bringing to its challenges as it emerged from bankruptcy on Thursday.

"We had two major tasks to accomplish during the bankruptcy," he said. "The first was to reset our debt load, and the second was to reset some of the operating costs of the business, and most importantly, the occupancy costs of a very large store fleet. We accomplished both of those in spades."

While doing either -- the company dropped its debt load to $435 million from $838 million and closed nearly 20 percent of its retail locations -- would have helped, Schwindle said doing both positioned the company well for the future.

The next moves are the same challenges that many in the industry are facing in a retail world that has shifted significantly. Retailers today are operating in an omnichannel environment, meaning their customers must be able to access products in a variety of ways, Schwindle said. Payless's extensive list of brick-and-mortar locations -- with about 2,400 stores in the United States -- is a bonus, he added.

"That kind of footprint gives us great advantage that very few retailers have in order to be proximate to our customers and be able to offer exposure to inventory assortments that are both online and in-store, as well as to allow our customers ultimately to be able to buy online and pick up in-store, as well," he said. "We've been working very hard on a number of those initiatives and are actually right now in the midst of starting to prototype those initiatives, as well. We're very excited about that."

In its bankruptcy filings, a Payless attorney said multiple factors kept the company from investing in an online presence that was necessary to be competitive.

Schwindle said retail is less about which channel and more about how to meet customer needs.

"This device is 10 years old this year," he said, gesturing with his Apple smart phone. "This has transformed our lives. We all have expectations around what and how we interact with retailers. Now, and it's not nearly as easy to accomplish from the retailer's perspective, we are all working hard to make sure that our capabilities match our customer's and consumer's expectations."

But despite the demands to be responsive to online avenues, Schwindle said he doesn't ever see the brick-and-mortar locations going away. In fact, he pointed to Amazon's decision to open retail stores to support the idea that all avenues are necessary.

"If you look at all these charts that show this meteoric rise in e-commerce, the scale goes from zero to 10 percent," Schwindle said. "If you regraph that chart on a zero to 100 percent basis, it's still significant, but it's not nearly as dramatic as it would otherwise seem. …

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