Payless files for bankruptcy

Associated Press

NEW YORK

Shoe chain Payless ShoeSource has filed for Chapter 11 bankruptcy protection, becoming the latest retailer to succumb to increasing competition from online rivals like Amazon.

The Topeka, Kansas-based retailer said Tuesday that it will be immediately closing nearly 400 stores as part of the reorganization. It has more than 4,400 stores in more than 30 countries and was founded in 1956.

Payless plans to reduce its debt by almost 50 percent, lower how much it pays in interest and line up funds. The company says some of its lenders have agreed make available up to $385 million to keep the stores running.

Shoppers are increasingly shifting their buying online or going to discount stores like T.J. Maxx to grab deals on designer brands.