Payless Shoe Chain Facing A Spinoff

May Department Stores Co. said Wednesday it would spin off its Payless ShoeSource chain and take a $70 million fourth-quarter charge.

As part of the spinoff, the company expects to close or relocate about 450 of its 4,557 Payless stores.

“Payless is a terrific business that we expect will perform well as an independent entity,” said David C. Farrell, chairman and chief executive officer of May.

Payless, based in Topeka, Kan., is the largest chain of self-service family shoe stores in the nation with sales last year of more than $2.1 billion. It has about 25,000 employees

May is one of the largest retailers in the nation, with 346 department stores, including Lord & Taylor, Hecht’s, Foley’s, Robinsons-May, Kaufmann’s, and Filene’s. It had sales of about $10 billion in 1994. May has 95,000 employees.

Farrell said Payless, which sells one out of every five pairs of shoes in the United States, will have better cash flow and be better positioned for growth with a more streamlined operation.