Payless ShoeSource will close 400 stores overall in the U.S. and Puerto Rico after filing for Chapter 11 bankruptcy.
Payless ShoeSource will close its stores in the Phillipsburg Mall and in Wind Gap Plaza as it heads into Chapter 11 bankruptcy.
The two Lehigh Valley area stores were among a list of 400 identified Wednesday that will close immediately in the U.S. and Puerto Rico because they are under-performing, the discount footwear retailer said.
In all, seven stores in New Jersey and 11 in Pennsylvania will close. Both the Phillipsburg and Wind Gap stores were open Wednesday.
Based in Topeka, Kansas, Payless ShoeSource has 4,400 stores globally and announced Tuesday it had filed for Chapter 11 bankruptcy protection.
"This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify," Payless CEO W. Paul Jones said in a statement. "We will build a stronger Payless for our customers, vendors and suppliers, associates, business partners and other stakeholders through this process."
Payless employs about 22,000 people.
Unaffected Payless stores in the Lehigh Valley include those in the Palmer Park Mall; Lehigh Valley Mall; Westgate Shopping Center; on Stefko Boulevard in Bethlehem; at the Whitehall Mall; South Mall; and West Valley Marketplace in Allentown.
The Lehigh Valley's biggest private employers
In Pennsylvania, the nearest store to the Lehigh Valley that will close is in North Wales, Montgomery County. Others on the New Jersey list are in East Rutherford, Marlton, East Brunswick, Bloomfield, Cape May Court House and Englishtown, the company said.
Besides the store closings in the U.S. and Puerto Rico, the company said it will "aggressively manage" its real-estate lease portfolio, while also making plans to expand in international markets.
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 to make available up to $385 million to keep the stores running.
Payless is the latest retailer to suffer from increased competition from online retailers such as Amazon and Zappos.
Other retailers that have announced store closures this year include Macy's, Kmart, JCPenney, Sears and RadioShack.
In the Slate Belt, this was the second closure announcement in two weeks for Wind Gap Plaza off Route 512. RadioShack announced March 22 it would close its Wind Gap Plaza location.
Jim Deegan may be reached at jdeegan@lehighvalleylive.com. Follow him on Twitter @jim_deegan. Find lehighvalleylive on Facebook.