LEE'S SUMMIT, Mo. (AP) -- Payless Cashways is closing 39 stores under a downsizing plan, including the building supplies company's three remaining Knox Lumber stores in Minnesota, which are in St. Paul, Little Canada and Hopkins.
Payless announced it would close the stores under a cost-cutting plan that would shed 1,500 workers.
The one-time Fortune 500 company is closing four of its 10 Kansas City-area stores and is pulling completely out of Indiana, Kentucky and Minnesota.
The company said it was forced to seek Chapter 11 bankruptcy court protection June 4 after sales dropped drastically in May, prompting lenders to tighten terms. That cut the company's ability to replenish stock, leaving closures as the only option to survive.
The downsizing plan was approved Tuesday by the U.S. Bankruptcy Court in Kansas City. After the stores are closed, the company will be left with 77 locations.
Upon hearing about the severance cut, many Kansas City area employees reacted with anger and frustration.
Before Tuesday, employees who were losing their jobs understood that they would get one week of pay for each year of service. But that amount was capped during Tuesday's court hearing at $4,650. Employees said their frustration was magnified by bonuses to Payless executives that were kept largely intact.
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