Payless ShoeSource is a discount footwear retailer that cousins Shaol and Louis Pozez founded in Topeka, Kansas in 1956. In 1961, it became a public company as the Volume Shoe Corporation which merged with the May Department Stores Company in 1979. In the 1980s, Payless was widely known in the U.S. for its Pro Wings line of discount sneakers, which often had Velcro straps instead of laces. In 1996, Payless ShoeSource became an independent publicly held company. In 2004, Payless Shoe Source announced to exit the Parade chain and it will close 100 Payless Shoe outlets. On August 17, 2007, the company acquired the Stride Rite Corporation and changed its name to Collective Brands, Inc.
Payless ShoeSource, Inc. is the largest footwear retailer in the United States. The company operates about 4,700 stores in all 50 states as well as Puerto Rico, Guam, Saipan, the U.S. Virgin Islands, Canada, Central America, the Caribbean, Ecuador, and Japan. It also sells footwear via the Internet at www.payless.com. Payless has built its success by offering a large selection of shoes at very low prices, most selling for less than $15 as of 2004. The company has been able to maintain its affordable prices by sticking exclusively to a self-service format, keeping a tight rein on cost structure, and insisting on efficient sourcing and inventory controls. Payless ShoeSource targets as its main customers women from 18 to 44 years of age with household incomes of less than $75,000, and it estimates that in any given year, 40 percent of the women in this target group buy at least one pair of footwear at a Payless store. Payless was acquired by the May Department Stores Company in 1979. The company remained a May subsidiary until 1996, when it was spun off to May shareholders as an independent, publicly traded firm.
Circa 1962-63, Volume Shoe company purchased the original Hill Brothers Shoe Company based in Kansas City, Mo and converted approximately all 25 of their stores to the "Payless" name. In 1971, Volume Shoe obtained the second Hill Brothers Shoe Store chain that was started in St. Louis, Mo in 1956 by Al Melnick and Sol Nathanson with the assistance and aid of the original Hill Brothers in Kansas City. The St. Louis version of "'Hill Brothers Self Service Shoe Store'" went from 3 to 103 stores in the Midwest and South between 1956 and 1971. Volume Shoe originally operated the 103 stores under the "Hill Brothers Self Service" name.
Starting in 1972, Volume Shoe began to consolidate stores in proximity and convert others to the "Payless" brand. The St. Louis operation of "'Hill Brothers Self Service'" stores were known for their bare bones minimalism and the slogan "two for five - man alive!" That is, women and children's shoes were two pair for five dollars
As it was opening 56 more stores in Canada in 2000, bringing the total to 236, Payless began looking south for additional growth. In September 2000 the company entered into a joint venture with local partners to operate Payless ShoeSource stores in the Central American region, specifically Costa Rica, Guatemala, El Salvador, the Dominican Republic, Honduras, Nicaragua, Panama, and Trinidad and Tobago. By January 2004 there were 150 Payless stores in the region. Next, a similar joint venture was created in November 2001 to pursue the South American market. This venture was operating 57 Payless stores in Ecuador, Chile, and Peru by January 2004. In 2003 Payless joined with the Japanese trading company Nichimen Corporation in another venture, which opened a test store in Japan in November 2004.
As the early years of the new century began to unfold, Payless was under increasing competitive pressure, in a brutal retail environment, from several challengers: discount chains, most notably Wal-Mart and Target Corporation; department stores, particularly the surging Kohl's Corporation; and specialty chains, such as Foot Locker and Shoe Carnival. The fairly steady rise in both profits and revenues of the late 1990s came to a halt. Another problem area was Parade of Shoes, which was posting disappointing profits. This and other concerns prompted a restructuring in the fourth quarter of the fiscal year ending in January 2002. Payless closed 104 underperforming stores (67 Parade units and 37 Payless ShoeSource outlets), cut 230 positions from the payroll, and took a $43 million after-tax restructuring charge. The operations of Parade also were consolidated with those of the flagship chain. For the year, Payless's earnings plummeted 62.3 percent to $45.4 million, while sales fell 1.2 percent to $2.91 billion. A longtime Payless veteran, Duane Cantrell, was named president in February 2002.
From 2001 to 2003, not only did net sales fall each year, but same-store sales (sales at stores open at least one year) fell each year as well. Payless furthermore suffered a net loss of $100,000 in 2003, and at its annual meeting in May 2004 it had to fight off a challenge from a dissident group of shareholders aiming to gain three seats on the company board. Having already committed to closing or relocating 230 Payless stores during 2004, the company announced a major overhaul in August of that year. The plan, expected to cost about $75 million, included closing down the 181-unit Parade chain, shutting down an additional 260 Payless ShoeStore outlets, exiting the Peruvian and Chilean markets, reducing certain wholesale businesses, and cutting expenses. The moves were intended to enable Payless to heighten its focus on a stronger core operation, though some analysts believed that they were insufficient to revive the struggling firm. By the end of 2004 Payless was operating a little more than 4,700 stores, compared with its peak total of about 5,100. Late in 2004 Cantrell resigned as president, and Payless announced that it was reviewing its agency account relationship for its North American advertising. It also reported that through December, same-store sales for the year were down 0.8 percent.
Principal Subsidiaries: Payless ShoeSource Canada Inc.; Dyelights, Inc.; Payless ShoeSource International Limited (Hong Kong); Payless ShoeSource Andean Holdings (Cayman Islands); Payless ShoeSource Asia PTE. LTD. (Singapore); Payless ShoeSource Japan Co. Ltd.; Payless ShoeSource Spain, S.L.
Principal Competitors: Wal-Mart Stores, Inc.; Target Corporation; Kmart Holding Corporation; Sears, Roebuck and Co.; Kohl's Corporation; J.C. Penney Company, Inc.
On October 27, 2010, Payless Shoe Source announced to sign 2 franchise deals to expand new international markets beginning in 2011. Payless will be purchasing Grupo Axo, a Mexico City headquartered chain, in late 2011 and will open 41 new stores in the next 3 years and possibly up to 300 stores in the Mexican Market long term. Indonesia, Malaysia , and Singapore were sealed for long term franchise deals and were entering the Payless Shoe Market. The deal will be opening 20 new stores across the three countries in 2011, followed by an aggressive rollout of stores in 2012 and beyond. Payless Shoe source has also opened 3 new stores in Jamaica.
Statistics:
Public Company
Founded: 1956 as Pay-Less National
Employees: 30,000
Sales: $2.78 billion (2003)
Stock Exchanges: New York
Ticker Symbol: PSS
NAIC: 448210 Shoe Stores; 454110 Electronic Shopping and Mail-Order Houses
Key Dates:
1956: Pay-Less National is founded in Topeka, Kansas, by two cousins, Louis and Shaol Pozez, to open self-service stores selling budget footwear.
1962: The company goes public as Volume Distributors.
1967: The company is renamed Volume Shoe Corporation; an accelerated expansion program is launched.
1978: The Payless ShoeSource name is adopted for the bulk of the company's retail outlets.
1979: Volume Shoe is acquired by the May Department Stores Company.
1991: The company name is changed to Payless ShoeSource, Inc.
1996: May spins Payless off to shareholders, making it once again an independent, publicly traded firm.
1997: The mid-priced shoe chain Parade of Shoes is acquired from J. Baker, Inc.; the first Canadian Payless stores open.
1999: The firm launches e-commerce at payless.com.
2000: Payless enters into a joint venture to expand into the Central American region.
2004: As part of a major restructuring, Payless announces that it will close down the Parade chain and close hundreds of Payless ShoeSource outlets.
Address:
3231 Southeast Sixth Avenue
Topeka, Kansas 66607-2207
U.S.A.
Payless ShoeSource, Inc. is the largest footwear retailer in the United States. The company operates about 4,700 stores in all 50 states as well as Puerto Rico, Guam, Saipan, the U.S. Virgin Islands, Canada, Central America, the Caribbean, Ecuador, and Japan. It also sells footwear via the Internet at www.payless.com. Payless has built its success by offering a large selection of shoes at very low prices, most selling for less than $15 as of 2004. The company has been able to maintain its affordable prices by sticking exclusively to a self-service format, keeping a tight rein on cost structure, and insisting on efficient sourcing and inventory controls. Payless ShoeSource targets as its main customers women from 18 to 44 years of age with household incomes of less than $75,000, and it estimates that in any given year, 40 percent of the women in this target group buy at least one pair of footwear at a Payless store. Payless was acquired by the May Department Stores Company in 1979. The company remained a May subsidiary until 1996, when it was spun off to May shareholders as an independent, publicly traded firm.
Circa 1962-63, Volume Shoe company purchased the original Hill Brothers Shoe Company based in Kansas City, Mo and converted approximately all 25 of their stores to the "Payless" name. In 1971, Volume Shoe obtained the second Hill Brothers Shoe Store chain that was started in St. Louis, Mo in 1956 by Al Melnick and Sol Nathanson with the assistance and aid of the original Hill Brothers in Kansas City. The St. Louis version of "'Hill Brothers Self Service Shoe Store'" went from 3 to 103 stores in the Midwest and South between 1956 and 1971. Volume Shoe originally operated the 103 stores under the "Hill Brothers Self Service" name.
Starting in 1972, Volume Shoe began to consolidate stores in proximity and convert others to the "Payless" brand. The St. Louis operation of "'Hill Brothers Self Service'" stores were known for their bare bones minimalism and the slogan "two for five - man alive!" That is, women and children's shoes were two pair for five dollars
As it was opening 56 more stores in Canada in 2000, bringing the total to 236, Payless began looking south for additional growth. In September 2000 the company entered into a joint venture with local partners to operate Payless ShoeSource stores in the Central American region, specifically Costa Rica, Guatemala, El Salvador, the Dominican Republic, Honduras, Nicaragua, Panama, and Trinidad and Tobago. By January 2004 there were 150 Payless stores in the region. Next, a similar joint venture was created in November 2001 to pursue the South American market. This venture was operating 57 Payless stores in Ecuador, Chile, and Peru by January 2004. In 2003 Payless joined with the Japanese trading company Nichimen Corporation in another venture, which opened a test store in Japan in November 2004.
As the early years of the new century began to unfold, Payless was under increasing competitive pressure, in a brutal retail environment, from several challengers: discount chains, most notably Wal-Mart and Target Corporation; department stores, particularly the surging Kohl's Corporation; and specialty chains, such as Foot Locker and Shoe Carnival. The fairly steady rise in both profits and revenues of the late 1990s came to a halt. Another problem area was Parade of Shoes, which was posting disappointing profits. This and other concerns prompted a restructuring in the fourth quarter of the fiscal year ending in January 2002. Payless closed 104 underperforming stores (67 Parade units and 37 Payless ShoeSource outlets), cut 230 positions from the payroll, and took a $43 million after-tax restructuring charge. The operations of Parade also were consolidated with those of the flagship chain. For the year, Payless's earnings plummeted 62.3 percent to $45.4 million, while sales fell 1.2 percent to $2.91 billion. A longtime Payless veteran, Duane Cantrell, was named president in February 2002.
From 2001 to 2003, not only did net sales fall each year, but same-store sales (sales at stores open at least one year) fell each year as well. Payless furthermore suffered a net loss of $100,000 in 2003, and at its annual meeting in May 2004 it had to fight off a challenge from a dissident group of shareholders aiming to gain three seats on the company board. Having already committed to closing or relocating 230 Payless stores during 2004, the company announced a major overhaul in August of that year. The plan, expected to cost about $75 million, included closing down the 181-unit Parade chain, shutting down an additional 260 Payless ShoeStore outlets, exiting the Peruvian and Chilean markets, reducing certain wholesale businesses, and cutting expenses. The moves were intended to enable Payless to heighten its focus on a stronger core operation, though some analysts believed that they were insufficient to revive the struggling firm. By the end of 2004 Payless was operating a little more than 4,700 stores, compared with its peak total of about 5,100. Late in 2004 Cantrell resigned as president, and Payless announced that it was reviewing its agency account relationship for its North American advertising. It also reported that through December, same-store sales for the year were down 0.8 percent.
Principal Subsidiaries: Payless ShoeSource Canada Inc.; Dyelights, Inc.; Payless ShoeSource International Limited (Hong Kong); Payless ShoeSource Andean Holdings (Cayman Islands); Payless ShoeSource Asia PTE. LTD. (Singapore); Payless ShoeSource Japan Co. Ltd.; Payless ShoeSource Spain, S.L.
Principal Competitors: Wal-Mart Stores, Inc.; Target Corporation; Kmart Holding Corporation; Sears, Roebuck and Co.; Kohl's Corporation; J.C. Penney Company, Inc.
On October 27, 2010, Payless Shoe Source announced to sign 2 franchise deals to expand new international markets beginning in 2011. Payless will be purchasing Grupo Axo, a Mexico City headquartered chain, in late 2011 and will open 41 new stores in the next 3 years and possibly up to 300 stores in the Mexican Market long term. Indonesia, Malaysia , and Singapore were sealed for long term franchise deals and were entering the Payless Shoe Market. The deal will be opening 20 new stores across the three countries in 2011, followed by an aggressive rollout of stores in 2012 and beyond. Payless Shoe source has also opened 3 new stores in Jamaica.
Statistics:
Public Company
Founded: 1956 as Pay-Less National
Employees: 30,000
Sales: $2.78 billion (2003)
Stock Exchanges: New York
Ticker Symbol: PSS
NAIC: 448210 Shoe Stores; 454110 Electronic Shopping and Mail-Order Houses
Key Dates:
1956: Pay-Less National is founded in Topeka, Kansas, by two cousins, Louis and Shaol Pozez, to open self-service stores selling budget footwear.
1962: The company goes public as Volume Distributors.
1967: The company is renamed Volume Shoe Corporation; an accelerated expansion program is launched.
1978: The Payless ShoeSource name is adopted for the bulk of the company's retail outlets.
1979: Volume Shoe is acquired by the May Department Stores Company.
1991: The company name is changed to Payless ShoeSource, Inc.
1996: May spins Payless off to shareholders, making it once again an independent, publicly traded firm.
1997: The mid-priced shoe chain Parade of Shoes is acquired from J. Baker, Inc.; the first Canadian Payless stores open.
1999: The firm launches e-commerce at payless.com.
2000: Payless enters into a joint venture to expand into the Central American region.
2004: As part of a major restructuring, Payless announces that it will close down the Parade chain and close hundreds of Payless ShoeSource outlets.
Address:
3231 Southeast Sixth Avenue
Topeka, Kansas 66607-2207
U.S.A.
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