Payless ShoeSource Restructures Senior Management Team and Announces Organizational Changes

TOPEKA, Kan./PRNewswire/ -- Payless ShoeSource (NYSE: PSS) today announced a restructuring of its senior management team. The action is an important step in the Company's plan to improve the alignment among key business functions, accelerate decision-making and reduce operating expenses.

The Company announced the planned promotion of Duane Cantrell, currently Executive Vice President of Operations, to President, effective February 3, Mr. Cantrell, a 23-year veteran of Payless ShoeSource, will replace Ken Hicks, the Company's current President, who will leave the company in February.

Mr. Cantrell has experience in Buying, Merchandising, Merchandise Distribution and Retail Operations. He will work with Mr. Hicks over the next 12 weeks to assure that the transition to the Company's new organizational structure is smooth and meets the Company's objectives. As President, Mr. Cantrell will continue to report to Steven Douglass, Chairman and Chief Executive Officer of Payless ShoeSource, Inc.

As part of the restructuring and alignment plan, the Company will centralize all domestic Retail Operations functions in Topeka, KS. Four division offices in Atlanta, Baltimore, Chicago, and Dallas will be closed by February 3, 2002, when the transition is complete.

As a result of the actions announced today, a total of 81 positions, including nine senior management positions, will be eliminated, reducing the Company's administrative expenses by $10 million annually.

Mr. Douglass expressed his confidence in Mr. Cantrell and the Company's senior officers. "Today, we have announced a reorganization plan that aligns all of our Company's resources around our core strategies of satisfying the needs of our customers and our shareowners. This restructuring was designed to make our operations more efficient and accelerate decision-making across our organization, so we remain a strong competitor in the fast-paced retail environment. We have an experienced senior management team and talented associates across our Company who will assure the continued success of our Company under this new, streamlined organizational plan."

"We appreciate the contributions that all of our associates have made to Payless ShoeSource over the years. Those who leave us now do so with our sincere thanks and best wishes. In particular, we are grateful for the contributions of Ken Hicks who has led our merchandising and marketing efforts since early in 1999."

Payless ShoeSource had previously announced that restructuring studies were underway in the Company. The Company had indicated it would take an $18 to $20 million charge against earnings in the fourth quarter as part of this effort. The Company is continuing its restructuring studies and anticipates making further reductions in its operating expenses.

Payless ShoeSource, Inc. is North America's largest family footwear retailer. The company operates a total of 4,964 stores offering quality family footwear and accessories at affordable prices. In addition, customers can buy shoes over the Internet through Payless.com(SM), at http://www.payless.com .

SOURCE: Payless ShoeSource, 11/13/2001
CONTACT: Timothy J. Reid of Payless ShoeSource, +1-785-295-6695
Company News On-Call: http://www.prnewswire.com/comp/136152.html
Website: http://www.paylessinfo.com
(PSS)