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The Payless Shoe Store Business Lesson
It’s not uncommon for me to get berated for targeting 10-year old and newer non-European vehicles. Over the years, I’ve learned that no matter how well I *think* I made my case, I’m never going to change anybody’s mind. Moreover, why should I want to? It’s much easier to keep doing what I’m doing and let others do the same.
However, a recent chain of events involving Payless Shoe Store illustrates the point I always fail to make in conversation. Here’s the chain of events:
- In April 2017, Payless Shoes, struggling with the migration of retail shopping to e-commerce, filed for Chapter 11 reorganization bankruptcy.
- Payless emerged from bankruptcy court protection in August 2017. The company was the first among a group of retailers going through bankruptcy since 2016 to successfully complete the process of restructuring.
- By the following summer of 2018, Payless learned the restructuring only delayed in the inevitable for both it’s North American physical locations & online store.
- In a boardroom squabble to prove a point, Payless opens an upscale shoe store in L.A. named “Paylessi” in late fall of 2018 as a prank. The “What the hell, we’re going out of business anyway.”- let’s see approach.
- The results are here: ABC News Story On Paylessi 1:36
- On February 14, 2019, Payless ShoeSource filed for bankruptcy liquidation and will close all 2,100 stores in the United States. Five days later, it announced would also close 248 stores in Canada.
Larry’s analysis: The prank shoe store would have only worked in certain locations, with L.A. being one of them. People will pay what you ask when they come to believe it’s value is what you ask. Not everybody will believe you. Pick a location and a demographic where there’s the highest likelihood of people to believe what you’re selling is worth what you say it is worth.
After my first 2 shop’s locations & demographics, I felt like I was waiting for my cat to bark. Any questions? 🙂
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