The discount shoe retailer Payless ShoeSource is set to close all of its stores when its files for bankruptcy later this month. Veuer’s Mercer Morrison has the story.
Payless ShoeSource began a liquidation sale Sunday after confirming Friday that it will close its 2,100 stores in the U.S. and Puerto Rico.
The giant discount retailer also has discontinued online sales; its website payless.com is directing shoppers to find a nearby store.
The company said all stores will remain open until at least the end of March and most will stay open until May.
Payless, based in Topeka, Kansas, which has called itself, “the largest specialty footwear retailer in the Western Hemisphere,” filed for bankruptcy in 2017 and closed 673 stores. The latest closings mark the biggest by a single chain this year, nearly doubling the number of retail stores set to shutter in 2019.
Payless hours Sunday vary by location. Go to payless.com and click “find a store” for details about an outlet near you.
But before you start bargain hunting, here are some things to keep in mind:
1. Don’t necessarily expect great deals in the early days.
Retailers know that consumers believe they can score outstanding discounts as soon as liquidation sales begin. For that reason, sales aren’t always extraordinary in the early going.
“Sometimes, at the beginning of a liquidation sale, a retailer may charge full price until inventory clears out,” according to Consumer Reports.
In fact, better deals may still be had elsewhere.
“Just because a business is advertising that it is closing does not mean they are offering the lowest prices on merchandise,” according to the Better Business Bureau.
2. Watch out for merchandise that’s not typically sold at the store.
Retailers often hire liquidators that specialize in winding down operations. Some cart in extra merchandise from other sources to supplement liquidation sales. Unsuspecting consumers may not know the difference.
“To avoid these items, check the tags to see if they differ from the retailer’s usual tags,” the California Society of CPAs advised. “If they do, consider carefully the quality and value of what you’re buying.”
3. The best sales might be available at the end of the process, but don’t wait too long.
Inventory dwindles rapidly toward the end of a liquidation sale. If you’re concerned that the store will run out of your desired product, don’t let the perfect deal be the enemy of the good discount.
“In the case of product markdowns, managers often discount heavily at the end of the liquidation process in order to achieve 100% sell-through of inventory, with the belief that leftover product is a clear sign of poor performance,” according to the Harvard Business School.
4. Understand the return policy.
There’s a good chance you won’t be allowed to return a product from a liquidation sale after a purchase. Make sure you understand your options before proceeding with a purchase.
For example, one retailer that recently liquidated, HHGregg, limited returns on items purchased during the liquidation to seven days and only on items “having a latent defect” that couldn’t be “reasonably” identified by the buyer, according to a court filing.
5. Use gift cards.
Retailers often ask and receive a federal judge’s permission to honor gift cards during liquidation sales.
But after the company is gone, your gift card is almost certainly useless. In the bankruptcy of bookstore chain Borders, for example, many people who failed to use their gift cards while the company liquidated were stuck with useless plastic after it was over.
“Use those gift cards ASAP,” the Better Business Bureau said. “Businesses that have entered into the liquidation process will not be around for very long and BBB advises consumers who are holding gift cards spend them as soon as possible or risk getting stuck with a worthless piece of plastic.”
Payless took over a former Armani store, renamed it “Palessi,” and sold shoes, typically priced at $20-$40 in Payless stores, at inflated designer price tags of $200 to $600.
Contributing: Nathan Bomey
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