The board of directors at Payless ShoeSource, Inc. has approved a management recommendation for major investment in the company's supply chain that is designed to enhance the company’s logistical efficiency and speed-to-market for on-trend footwear and accessories.

The plan involves shifting from its current single 850,000 square foot distribution centre located in Topeka, Kansas, to a dual-centre distribution centre model through the establishment of a new 400,000-square-foot distribution centre in Redlands, California, which is due to open this summer, and a new 600,000-square-foot distribution centre east of the Mississippi river by the summer of 2008.

As Payless stores are heavily clustered in the more populated coasts and borders of the USA, it is hoped that with a distribution centre on the west coast and another east of the Mississippi river, the new supply chain model will become more aligned with the company's store geography.

The company plans to close its existing Topeka facility in the summer of 2008, once the two new distribution centres are operational, and this is likely to affect approximately 450-550 jobs.

As of the end of the third quarter 2006, Payless had 4,574 stores located in the USA, Canada, Puerto Rico, and Central and South America.