US discount footwear retailer Payless ShoeSource has received approval from its board of directors to seek court approval of up to $25m in debtor-in-possession (DIP) financing.
Funding will be offered by certain existing lenders of the retailer with support from key parties-in-interest.
Payless has submitted the DIP financing for approval with the US Bankruptcy Court for the Eastern District of Missouri.
Payless chief restructuring officer Stephen Marotta said: “After reviewing multiple proposals, we have chosen a financing plan that will enhance our ability to serve our customers and support suppliers worldwide.
“Once approved, the funds will be available to finance the cost of goods, shipping and freight in order to augment the ongoing liquidation sales.
“I’d like to thank our factory and supplier partners, who have worked to enable us to efficiently execute our store closing sales, and the vendors that delivered goods from ports in Asia.”
The US discount footwear retailer filed for bankruptcy earlier this month and announced plans to close more than 2,500 stores across North America.
Following this, the US Bankruptcy Court has approved the company’s first-day motions related to its voluntary chapter 11 filings.
The company has also retained A&G Realty Partners to manage the sale of its 2,587 store leases across the US and Canada.
Akin Gump Strauss Hauer & Feld and Armstrong Teasdale are acting as legal counsellers, while Ankura Consulting Group is the restructuring advisor. A&G Realty Partners will be Payless ShoeSource’s real estate consultant. Cassels Brock and Blackwell is acting as Payless Canada’s counsel.
The company operates 420 stores in the US, Latin America, Virgin Islands, Guam, and Saipan. It also has 370 international franchise stores across the Middle East, India, Indonesia, Indochina, the Philippines, and Africa.