FORMERLY PE OWNED
Payless ShoeSource
Includes Payless, Payless Shoes
footwear · Topeka, KS
- PE Firm
- Golden Gate Capital
- Year Acquired
- 2012
PE extracted $350 million in dividends in two years, then presided over the largest store liquidation by count in U.S. history.
What Happened
- Golden Gate Capital and Blum Capital bought Payless in 2012 for $1.3 billion, with roughly $2 billion in total debt loaded onto the deal
- Within two years, the PE owners extracted over $350 million — borrowing money in Payless's name and paying it straight to themselves
- First bankruptcy in 2017 closed roughly 400 stores; second bankruptcy in 2019 liquidated all remaining 2,300+ U.S. locations
- The 2019 liquidation was the largest by store count in U.S. retail history — aggrieved creditors alleged the PE dividend extraction drove the company into insolvency
The Damage Done
- All 2,300+ U.S. stores liquidated in 2019 — the largest retail liquidation by store count in American history
- Budget-conscious shoe shoppers lost a go-to option, with no direct replacement at the same price point in most malls and shopping centers
- Thousands of retail workers lost their jobs across two rounds of bankruptcy in under two years
- Communities, especially in lower-income areas, lost an affordable footwear retailer while PE owners walked away with hundreds of millions in extracted dividends