Payless Cashways

Payless Cashways Inc. was a building materials retailer based in Kansas City, Missouri. The company primarily operated during the 1980s and 1990s throughout the Midwestern United States, and is considered among the first national chains to implement the DIY strategy. The company experienced financial difficulties during the late 1990s and was forced to liquidate in 2001.

Payless Cashways differed from modern home improvement retailers in that they utilized a fully functional outdoor lumber yard. Customers would purchase materials inside the store and upon payment, would drive their vehicle into the lumber yard area and give their order ticket to an attendant. Prior to filing for bankruptcy protection, Payless Cashways operated 194 stores across 22 states.^[1]

History

Payless Cashways faced their first major challenge in 1988, when they were the target of a leveraged buyout led by Asher Edleman and Sutherland Lumber.^[2] The company also received a takeover bid from The Ward White Group, a British company which operated a similarly named retailer in Britain.^[3][4] In response to the takeover attempts, Payless Cashways repurchased the company's 33.6 million outstanding shares at $27 per share, totaling $909 million.^[5] The Payless Cashways stock buyback left them saddled with massive debt that stopped their expansion.^[6] The retailer's stagnation caused them to be left behind by the big box home centers such as Builders Square, HomeBase, and later the emerging Home Depot and Lowe's chains.^[7] The company struggled through the nineties with moderate successes and recurrent failures and never regained the momentum of their first wave of expansion. In July 1997, Payless Cashways filed for Chapter 11 bankruptcy protection.^[1] The last straw for Payless Cashways was the burst of the dot com bubble that left many banks unwilling to help the company continue its operations. On September 10, 2001 the company was ordered to be liquidated.^[6]

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