Payless Plans New Plant

The company wants to improve its supply chain.
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Payless ShoeSource

(PSS)

plans to open a second product replenishment facility in the western U.S.

The Topeka, Kan., shoe retailer said the new plant will supply merchandise to stores west of the Rocky Mountains. The exact location of the additional facility is still being determined. The estimated opening date for the additional facility is summer of 2007.

The announcement comes after several months of analysis of the company's supply chain that was initiated to identify opportunities to improve speed-to-market and to better support the company's merchandise positioning with its customers. By adding a second replenishment facility in the west, the company expects to improve customer satisfaction by shortening product delivery times to its stores.

After opening the additional distribution facility, the Topeka Distribution Center is expected to replenish all North American stores east of the Rocky Mountains. Over the coming months, the company's management team will be developing plans to ensure a smooth transition and startup of the additional facility.

"This effort to bring the company's trend-right merchandise more quickly and more efficiently to its customers is expected over time to have a positive impact on the company's overall business success and support future growth," Payless said.

On Friday, Payless shares fell 41 cents to $23.46.