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Collective Brands to close 475 shoe stores

The announcement comes as the parent of Payless ShoeSource and Stride Rite reports a large second-quarter loss.

August 25, 2011|By Andrea Chang, Los Angeles Times

Collective Brands Inc., the parent of Payless ShoeSource and Stride Rite, will close 475 stores after reporting a large second-quarter loss.

The company also said Wednesday that it was conducting a review of "strategic and financial alternatives," which could mean a sale of the company.

The store closures affect underperforming locations and will occur over the next three years, the Topeka, Kan., company said. About 400 of the stores slated to close are Payless locations in the U.S., Canada and Puerto Rico; 75 are Stride Rite children's shoe store locations.

The company reported sales rose 4.9% to $882.4 million in the three months ended July 30. Sales at stores open at least a year, an important measure of a retailer's health, declined 0.7%.

The company also said it lost $35 million, or 58 cents a share, in the second quarter compared with profit of $21.1 million, or 32 cents a share, during the same period a year earlier.

"While the second quarter was challenging for the company, we are taking aggressive actions to improve the business," said Michael J. Massey, Collective Brands' chief executive.

Shares of Collective Brands rose 2.6%, or 26 cents, to $10.28 on Wednesday. In after-hours trading, shares jumped more than 35%.

A Collective Brands spokeswoman said the company did not plan to release a list of store closures.

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