Feb 19, 2019

Payless' second bankruptcy follows a pattern

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Data: BankruptcyData; Chart: Axios Visuals

Payless ShoeSource has filed for bankruptcy protection — and intends to close all of its stores in the U.S. and Puerto Rico — just 2 years after it emerged from its last bankruptcy proceeding.

Why it matters: Payless' second bankruptcy follows a clear trend in the retail sector.

By the numbers: According to an Axios analysis of BankruptcyData research, 8 out of the 10 biggest bankruptcy declarations (by assets) in which the company remained intact were followed by another bankruptcy protection filing.

  • The largest was Kmart, which emerged from its 2002 bankruptcy and later merged with Sears. The merged company filed for bankruptcy last year.
  • Payless Cashway — not to be confused with the discount shoe retailer — filed for bankruptcy in 1997, then went out of business following a subsequent bankruptcy in 2005.
  • Hills Department Stores, No. 4 on the list, was acquired by Ames 7 years after it emerged from bankruptcy protection. Ames itself went bankrupt in 1990, then went bankrupt again in 2001.

The big picture: Payless' dance with bankruptcy protection is common for companies in the business of sales. Retailers will often use "bankruptcy to reorganize by shedding debt and closing stores, but often these companies end up with a second bankruptcy soon after," as CNN Business points out.

The exceptions:

  • Zale Corp. avoided a second bankruptcy protection filing when it was bought by Signet Jewelers in 2014.
  • Claire's emerged from bankruptcy late last year and eliminated $1.9 billion of debt.

Go deeper: Axios' Deep Dive on the future of retail

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  1. Global: Total confirmed cases as of 7 p.m. ET: 932,605 — Total deaths: 46,809 — Total recoveries: 193,177Map.
  2. U.S.: Total confirmed cases as of 7 p.m. ET: 213,372 — Total deaths: 4,757 — Total recoveries: 8,474Map.
  3. Business updates: Very small businesses are bearing the brunt of the coronavirus job crisis.
  4. World update: Spain’s confirmed cases surpassed 100,000, and the nation saw its biggest daily death toll so far. More than 500 people were reported dead within the last 24 hours in the U.K., per Johns Hopkins.
  5. State updates: Florida and Pennsylvania are the latest states to issue stay-at-home orders — Michigan has more than 9,000 confirmed cases, an increase of 1,200 and 78 new deaths in 24 hours.
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World coronavirus updates: Spain's health care system overloaded

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens and confirmed plus presumptive cases from the CDC

Two planes with protective equipment arrived to restock Spain’s overloaded public health system on Wednesday as confirmed cases surpassed 100,000 and the nation saw its biggest death toll so far, Reuters reports.

The big picture: COVID-19 cases surged past 900,000 and the global death toll surpassed 45,000 early Wednesday, per Johns Hopkins data. Italy has reported more than 12,000 deaths.

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Guns on display at a store in Manassas, Va. Photo: Yasin Ozturk / Anadolu Agency via Getty

The FBI processed a record 3.7 million gun background checks in March — more than any month previously reported, according to the agency's latest data.

Driving the news: The spike's timing suggests it may be driven at least in part by the coronavirus.