Brookville distribution hub in danger as Payless prepares for bankruptcy

Published: Friday, February 15, 2019 @ 9:42 AM
Updated: Saturday, February 16, 2019 @ 10:17 AM

Payless ShoeSource has plans to close all stores.
Payless ShoeSource has plans to close all stores.

Payless ShoeSource plans to close all of its roughly 2,300 stores when it files for bankruptcy later this month, but the effects could be larger on Montgomery County, where the company employs hundreds at a Brookville distribution center.

Payless has been unsuccessful in finding a buyer and is preparing to run going-out-of business sales as early as next week, sources close to the matter told Reuters.

A Payless spokeswoman said the company will begin liquidation sales at its U.S. stores on Sunday and is winding down its e-commerce operations. Stores are expected to remain open until at least the end of March and the majority will remain open until May, she said.

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This would be Payless’s second bankruptcy filing, after emerging from an April 2017 filing about 18 months ago.

Roughly 550 people are employed at a Payless distribution center at 1 Collective Way in Brookville, according to the Montgomery County Economic Development office.

An employee at the distribution center referred all questions to the company’s corporate office, which did not respond to request for comment about what happens to employees at the distribution center.

The Dayton Daily News has also reached out to Montgomery County Economic Development and Brookville city officials for more details.

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Collective Brands, the former owner of Payless before private equity firms Golden Gate Capital and Blum Capital Partners bought Payless in 2012, first announced it would build the 600,000 square-foot Eastern Distribution Center in May 2007.

Local officials credited the Payless facility for bringing other major projects to the area, including the $90 million Proctor & Gamble, distribution center at the Dayton Airport.

Logistics firm Prologis closed on the deal for the 1.8 million square-foot center in 2013, which now employs 1,300 people.

“With the Payless facility, I think people start to notice that,” said Dan Foley at the time, when he was in his second term as Montgomery County commissioner. “They say, ‘Hey, that’s a major company that picked the Dayton region for a reason.’”

Now more than 10,000 people are employed in logistics operations in the Dayton region.

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But the changing retail landscape has claimed some logistics jobs in the region, with one of the biggest loses when Elder-Beerman’s parent company Bon-Ton filed for bankruptcy and closed all stores last year. About 96 people lost their jobs at the distribution center alone when the company shut down.

A string of bankruptcies have already claimed thousands of U.S. retailers this year, including some GAP, Gymboree, Things Remembered and Crazy 8 stores. Last year some high-profile businesses like Toys “R” Us and Sears closed hundreds of stores after filing for bankruptcy.

There are Payless locations in the Dayton Mall, Mall at Fairfield Commons, Sugar Creek Plaza, Midpointe Center in Middletown, on Salem Avenue in Dayton, at Bechtle Crossing in Springfield, on Voice of America Drive in West Chester, Bridgewater Falls in Hamilton and others in the Cincinnati area.

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