Topeka, Kan. -- Collective Brands, parent company of Payless and Stride Rite shoe chains, announced Wednesday that it would close 475 underperforming stores over the next three years and has hired a firm to help it explore its options.
The company hired Perella Weinberg Partners and Kurt Salmon as advisors to explore strategic alternatives.
Collective Brands reported a 2Q loss of $35 million on Wednesday, compared to a profit of $21.1 million a year earlier. The loss included a one-time charge of $83.6 million based mostly on the declining value of its stores and of Stride Rite’s trade name. The company currently operates 4,844 stores, of which 4,461 are Payless stores.
Of the 475 stores targeted for closure over the next three years, more than 300 will be shuttered by the end of the year, including about 275 Payless and 75 Stride Ride children's stores. The strategy, said Collective, is to optimize the performance of its Payless and Stride Rite stores.
"While the second quarter was challenging for the company, we are taking aggressive actions to improve the business," said CEO Michael J. Massey.
The company’s board adopted a short-duration shareholder rights plan to fend off a potential hostile takeover. Its largest shareholder is PrimeCap Management Co., with just over 10% of outstanding shares.