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Supply Chain Slowdown Leads to Shoe Store Bankruptcy

April 7, 2017 Leave a comment dridrive

sneaker shopRemember the west coast port labor dispute that disrupted supply chains back in 2015? The effects of the slowdown are still making themselves known, in the case of the recently-announced bankruptcy of Payless ShoeSource.

According to its filings, the company – the largest footwear chain in the U.S. – pointed to the labor dispute, saying it backed up cargo flows, keeping stores from stocking their shelves during the major Easter selling season.

The inventory arrived so late that Payless had to sell the shoes at a deep discount, leaving them without the cash needed to compete with the growth of e-commerce sites, which hastened their financial struggles.

As part of its bankruptcy filing, PayLess plans to close at least 400 of its 4,400 stores worldwide, a continuing trend among retailers hoping to survive by reducing their physical presence.

It’s also a stark lesson for developing a resilient supply chain that can handle a disruption.