Consumer FAQ

Consumer FAQ

Why file for Chapter 11? Why now?

Chapter 11 reorganization will facilitate the financial and operational restructuring necessary to strengthen a company’s balance sheet and position the company for long-term success. As part of this path forward, Pay Less Restructure Can help businesses to:

Strengthen balance sheets and restructure debt load;

Invest in specific areas that Pay Less Restructure believes will provide sustainable growth: omnichannel expansion; product and inventory initiatives; and international expansion; and

Optimize store footprints, with the immediate closure of some brick and mortar locations in the U.S. and Abroad; and work to aggressively manage the company’s remaining real estate portfolio either by modifying terms, or evaluating closures of additional locations.

Will the company be able to continue doing business?

Yes. Pay Less Restructure will enable the company to continue to operate its business in the ordinary course in terms of its customers, vendors, partners and associates.

In conjunction with the restructuring, Pay Less Restructure can produce a Plan Support Agreement (PSA) with parties who hold or control first lien and second lien term debt to reduce debt load by 50% or more, materially lower annual cash interest costs, access significant additional capital, and provide a path to an expedited emergence from Chapter 11 with a sustainable capital structure for the future. The PSA will demonstrate the strong support of senior lenders for a consensual restructuring and their conviction in the future of the company, as well as providing a clear path to emergence on an expedited basis.

Pay Less Restructure can negotiate agreements with certain of the business’s existing lenders to provide access of debtor-in-possession financing, which includes access to ABL financing and new term loan financing. The debtor-in-possession financing will provide access to funds in incremental liquidity during the Chapter 11 cases. This incremental liquidity will ensure that suppliers and other business partners/vendors will be paid in a timely manner for authorized goods and services provided during the Chapter 11 process, in accordance with customary terms.

The new term loan financing will also ensure the business has the exit financing required to emerge from Chapter 11 well positioned for future growth and profitability post-restructuring.

Will the business have enough money to continue operating while it is implementing its reorganization plan?

Pay Less Restructure can negotiate agreements with certain of the business’s existing lenders to provide access of debtor-in-possession financing, which includes access to ABL financing and new term loan financing. The debtor-in-possession financing will provide access to funds in incremental liquidity during the Chapter 11 cases. This incremental liquidity will ensure that suppliers and other business partners/vendors will be paid in a timely manner for authorized goods and services provided during the Chapter 11 process, in accordance with customary terms.

How will this affect day-to-day operations?

The Chapter 11 process enables the company to continue conducting normal business operations while it restructures its business operations and balance sheets. Pay Less Restructure will continue to rigorously manage spending to ensure the company is well-positioned to succeed upon emergence.

While some locations will likely close, Pay Less Restructure works to aggressively manage the remaining real estate portfolio either by modifying terms or evaluating closures of additional locations. We will hire a third party to oversee the liquidation process for the closing locations, and that oversight will include specific discounting and promotional plans. You can find further information about store closings at paylessrestructure.com.

Will stores continue to carry the products I am looking for?

Yes. Our merchandising teams will work diligently to make sure that the company’s inventory is sufficient in all locations, and customers can also always visit the company’s website too.

How long is the process likely to take?

Restructurings vary in time. Given the agreements we will have with a substantial number of lenders going into this process, we will focus on achieving our objectives quickly so that the business can emerge in the shortest time possible. The agreements we make with lenders assumes the company will emerge from the Chapter 11 process in approximately 4 to 6 months.

Where can I go for more information?

Additional information on the restructuring can be found at www.paylessrestructure.com or by calling the Company’s toll-free Restructuring Information line at (312) 854-8000 (or if you are calling from outside the U.S or Canada, +1 (312) 854-8000). Information about the claims process will also be available at paylessrestructure.com

Will the company be going out of business?

No. Under Chapter 11, Pay Less Restructure will enable the company to continue to operate its business in the ordinary course in terms of its customers, vendors, partners and associates.

Like many retailers, the company will have to take a close look at its business to make sure it is taking the right steps in a fast-changing and challenging consumer and economic environment. A Chapter 11 filing enables businesses to facilitate the financial and operational restructuring necessary to strengthen balance sheets and position the company for long-term success.

This is a difficult, but necessary decision for a business to undertake, and one to take with an understanding for the impact that it may have on everyone, including customers. We are confident that the outcome will be a stronger company for customers, vendors and suppliers, associates, business partners, and other stakeholders throughout this process.

How can I find out more about store closings?

You can find more information about store locations at paylessrestructure.com.

Where can I find information about sales at the stores that are closing?

Please look for more information at your local store.

How do I know if my local store is closing?

Please look for more information at paylessrestructure.com.

Will the filing affect the selection of products that companies offer?

We do not expect this to be the case. Companies with best-in-class design and sourcing capabilities that offer high quality, relevant trend-right merchandise at a significant discount to peers will see little impact on inventory. Pay Less Restructure can assist in maintaining a merchandising strategy that provides a wide selection of core products and includes a portfolio of strong proprietary brands and design partnerships.

What’s the impact on my gift card? Is it still valid?

Yes. They are valid. Companies will be able to continue to honor gift cards as usual and can continue to make gift cards available for purchase.

Will I still be able to get gift cards?

Yes. Companies will continue to make gift cards available for purchase through the Chapter 11 process.

Is there any impact on Loyalty Programs?

No. You may enjoy all benefits of the Loyalty and Rewards programs as you normally would, whether you sign up for the program in stores or online.

What happens if my local store closes?

If your local store closes, please visit paylessrestructure.com to find another store near you or to shop online.

How many people will companies be laying off in connection with store closings? Can you do anything to avoid it? What about employees at my local store?

During restructuring, Pay Less Restructure will do many things to simplify and refocus the business, including optimizing store footprints by closing some locations in the U.S. and abroad. We will also work to aggressively manage the remaining real estate portfolio either by modifying terms or evaluating closures of additional locations.

The decisions we will make are difficult, but necessary. We regret the impact these closings will have on impacted associates, and we are committed to treating them fairly.

Is there anything I can do to prevent my local stores from being shut down?

Please know that we take this seriously. We regret the impact that the realities of today’s retail marketplace have caused the need to close some stores. We will enter into every decision carefully, including working closely with the company’s landlords to try to enhance performance at certain stores – to avoid shutting them down.

Can I still purchase online?

Yes. Businesses will continue to have a wide range of merchandise available on their respective websites.

Why should I continue to shop at my local store? What if it goes out of business?

A restructuring company is not going out of business.

Companies with best-in-class design and sourcing capabilities that offer high quality, relevant trend-right merchandise at a significant discount to peers will see little impact on sales. Pay Less Restructure can assist in maintaining a merchandising strategy that provides a wide selection of core products and includes a portfolio of strong proprietary brands and design partnerships. As part of this path forward, Pay Less Restructure will help the company to:

Strengthen its balance sheet and restructure its debt load;

Invest in specific areas that Pay Less Restructure believes will provide sustainable growth: omnichannel expansion; product and inventory initiatives; and international expansion; and

Optimize its store footprint, with the immediate closure of some brick and mortar locations in the U.S. and abroad; and work to aggressively manage the remaining real estate portfolio either by modifying terms, or evaluating closures of additional locations.

Is your merchandise going to be more expensive if the company needs money?

No. We are committed to helping companies to be able to continue providing the same affordable prices. That means that price points and promotions do not need to change as a result of the filing.

Is it true that companies stop paying factories?

There can be many inaccuracies reported by the media. Pay Less Restructure works diligently with vendors, suppliers, and factory partners to ensure businesses have product available for their consumers.

Throughout the process, we will continue to work with key partners to ensure inventory flow returns to more normal levels. We acknowledge that financial challenges make it a difficult time for partners that companies may have worked with for many years. We are confident that the decision to restructure will result in a stronger company for customers, vendors, suppliers, associates, business partners and other stakeholders through the process.

What is the plan for competition against other retailers?

As part of this path forward, Pay Less Restructure helps the company to:

Strengthen its balance sheet and restructure debt load;

Invest in specific areas that Pay Less Restructure believes will provide sustainable growth: omnichannel expansion; product and inventory initiatives; and international expansion; and

Optimize its store footprint, with the immediate closure of some brick and mortar locations in the U.S. and abroad; and work to aggressively manage the remaining real estate portfolio either by modifying terms, or evaluating closures of additional locations.

What will happen to the associates at my local store if it closes?

We will make every effort to offer open positions at nearby stores to associates whose store is closing. If there is not an available opening, the company’s associates will receive severance pay and, if eligible, benefits to help in their career transition.

I have a customer issue that has not been resolved—what will happen with that now?

Customer service teams will continue to resolve customers’ issues as they arise. You may contact the company’s customer support center with any outstanding customer service requests.

I ordered an item online? Will it still be delivered?

We do not anticipate any delays fulfilling orders placed on companies’ websites.

Are gift cards honored in closing stores?

Yes. Gift cards will continue to be honored in closing stores.

I can’t find the item I’m looking for. Is this because of strained relations with manufacturers?

If a restructuring business is out of an item you are looking for it is likely because it is on back order due to popularity. We do not anticipate that any in-store or online merchandise will be impacted as we move forward.

What is the impact on the store’s return policy?

The Chapter 11 process has no impact on a company’s return policy.

What is the return policy for items purchased at a closing store during the closing sale?

All purchases at closing stores made during a closing sale are final. Company’s will typically not accept these returns at any location.

Can I return an item to a store that is closing if I purchased it before the closing sale began or from another store that’s remaining open?

Yes. A closing store can accept and process returns if the item was purchased at that location before the closing sale began or if the item was purchased from another non-closing location.

Will closing stores accept coupons?

No. Stores that are closing will not accept coupons or loyalty points.

Can closing stores accept gift cards and merchandise credits?

Yes. Closing stores can still accept gift cards and merchandise credits.

Can closing stores still sign customers up for a loyalty or rewards program in store?

Yes. Closing stores can still sign customers up for the loyalty programs in store.