Payless Board Approves up to $25 Million of DIP Financing from Certain Term Loan Lenders

Financing Plan Subject to Court Approval, Scheduled for Early Next
Week

TOPEKA, Kan.–(BUSINESS WIRE)–Payless ShoeSource (“Payless” or the “Company”) today announced that the
Payless Board of Directors has authorized the Company to seek court
approval of up to $25 million in debtor-in-possession (“DIP”) financing,
which will be provided by certain of the Company’s existing lenders. The
DIP financing, which also has the support of key parties-in-interest,
has been submitted to the U.S. Bankruptcy Court for the Eastern District
of Missouri for approval and will be on the Court’s calendar for early
next week.

Stephen Marotta, Chief Restructuring Officer of Payless, said, “After
reviewing multiple proposals, we have chosen a financing plan that will
enhance our ability to serve our customers and support suppliers
worldwide. Once approved, the funds will be available to finance the
cost of goods, shipping and freight in order to augment the ongoing
liquidation sales. I’d like to thank our factory and supplier partners,
who have worked to enable us to efficiently execute our store closing
sales, and the vendors that delivered goods from ports in Asia.”

Additional information regarding Payless’ Chapter 11 filing is available
at www.payless.com/restructure.
Court filings and information about the claims process are available at http://cases.primeclerk.com/pss.
Questions should be directed to the Company’s claims agent, Prime Clerk,
at +1 917-877-5967 (toll) or +1 844-339-4268 (U.S. / Canada toll-free),
or by sending an email to pssinfo@primeclerk.com.

Akin Gump Strauss Hauer & Feld LLP and Armstrong Teasdale LLP are
serving as the Company’s legal counsel and Cassels Brock & Blackwell LLP
is serving as Payless Canada’s counsel. Ankura Consulting Group is
serving as the Company’s restructuring advisor. PJ SOLOMON is serving as
financial advisor to the Company. A&G Realty Partners is serving as real
estate consultant to the Company.

About Payless

Founded in 1956, today Payless serves millions of customers through its
extensive global network spanning 36 countries worldwide. Payless has
420 stores in Latin America, the U.S. Virgin Islands, Guam and Saipan,
and 370 international franchisee stores across the Middle East, India,
Indonesia, Indochina, Philippines and Africa.

Contacts

Lauren Jeffords
Payless
785.430.8581
corporate.communications@payless.com

Paul Caminiti/Hugh Burns/Delia Cannan/Molly Curry
Reevemark
212.433.4600
payless@reevemark.com

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