The Topeka, Kansas-based retailer said it will be closing nearly 400 under-performing stores immediately as part of the reorganization. It has more than 4,400 stores in more than 30 countries and was founded in 1956. The company has not yet released a list of stores affected, but plans to post a list on a special website designated for the restructuring.
"This is a difficult, but necessary decision for Payless, and one we take with an understanding for the impact that it may have on everyone, including our customers," the company said on its website. "We are confident the outcome will be a stronger Payless for our customers, vendors and suppliers, associates, business partners, and other stakeholders throughout this process."
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.
The company said it expects to emerge from the Chapter 11 process in about four months.
Fourteen stores will be closing in Illinois - eight of them locally. Four stores in Chicago will close, as well as one each in Waukegan, Merrionette Park, Lake Zurich, and Orland Park. Stores will also close in Forsyth, Rockford, Danville, Sterling, and Moline.
Rockton Shopping Center
Rockford
Hickory Point Mall
Forsyth
4111 N Vermilion
Danville
Scottsdale Shopping Center
Chicago
Fountain Square
Waukegan
9047 S Commercial Ave
Chicago
4301 Avenue Of The Cities
Moline
4500 16Th St
Moline
Pine Tree Plaza
Sterling
Stonebrook Plaza
Merrionette Park
5607 W Belmont Ave
Chicago
Lakeview Plaza
Orland Park
Deerpath Commons Shopping Center
Lake Zurich
Courtesy Plaza Shopping Center
Chicago
The Associated Press contributed to this report.