Payless cutting corporate jobs to 'realign' around stores
Payless ShoeSource this weekend said that it's realigning its North America retail organizational structure, increasing the number of associates who work closer to the store level while reducing layers between its corporate headquarters and retail stores. Payless didn't immediately respond to Retail Dive's question about how many jobs might be cut.
The objective is to drive results through coaching, mentoring and developing a strong team of group leaders, who will in turn, lead the majority of Payless' store teams, according to a press release. The realignment is part of the retailer's ongoing efforts to "modernize its approach to serving its customers in a continuously changing retail environment" and focus on prioritizing its core customer base, the company said.
As Payless eased out of its Chapter 11 restructuring last summer, Jones said that the retailer had emerged a "stronger and healthier enterprise." The retailer is hoping to take that even further by cutting down its corporate ranks and bolstering the operations in its remaining stores, which interim CEO Martin R. Wade, III says will be key to its success.
"In the fall and early winter, we began a process of putting the emphasis of our business back where it should be – on our customers, our lifeline," he said in a statement. "This week we took another step forward in that effort, by increasing the number of associates and group leaders who are closest to our customers."
The retailer maintains significant brand equity, but has struggled to maintain market share in recent years. Founded in 1956 in Topeka, Kansas, Payless disrupted shoe retail by introducing a no-frills, self-service approach that allowed for lower prices. The concept was a hit with customers, but it's no longer a new one as the old-fashioned shoe salesperson who measures feet is now relegated to department stores (except Macy's, which is moving to self-service) and some specialty stores.
The shoe retailer was yet another victim of a leveraged buyout by private equity owners. Payless was bought in 2012 by private equity firms Blum Capital and Golden Gate after they and footwear company Wolverine took its parent company (Collective Brands) private. Wolverine now runs the Sperry Top-Sider, Stride Rite and Keds brands as a result of that deal. Moody's Investors Service in February cut the retailer's rating and outlook, based on its declining performance and debt pressure.
Bankrupt apparel retailers The Limited, Wet Seal and J. Crew have also stumbled under the debt loads heaped upon them by their respective private equity owners. "These poor apparel chains end up one way or another in the hands of private equity — and in the end, there's no company, no stores, no employees, and the private equity made money," Howard Davidowitz, chairman of New York City-based retail consulting and investment banking firm Davidowitz & Associates, told Retail Dive last year. "Congratulations. That's how it works."
- press release via PR Newswire Payless Continues to Focus on Customers, Announces Realignment of Organizational Structure
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