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Payless ShoeSource Closing 104 Stores

TOPEKA, KS-Even after the cutbacks, the 4,974-store retailer expects to have a net increase of 75 to 80 stores this year. Cost of the closings, including lease terminations, are estimated at $70 million.

By Jim McCartney | Updated on January 30, 2002

TOPEKA, KS-Payless ShoeSource Inc. says it will close 104 stores as part of cost slashing effort that will cost about $43 million this year on an after-tax basis. Even so, the 4,974-store retailer expects a net increase of 75 to 80 stores during fiscal 2002 — evenafter including the planned store closings.

The footwear retailer says it has completed a previously announced restructuring study designed to improve the alignment of key business functions, accelerate decision-making and reduce operating expenses.

The company anticipates taking a fourth-quarter charge of about $70 million pre-tax, $43 million after-tax, or about $1.94 per share. The charge includes costs associated with the closing of 104 under-performing stores, including severance, lease terminations, assetwrite-offs for closed and impaired stores, and fees for professional services relating to developing and implementing the restructuring plan. The charge also will include the previously announced estimate of $18 million to $20 million for restructuring the corporate office and the closing of four division offices.

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