Struggling retail sector claims another Route 58 storefront

Another Route 58 retailer is closing.

Payless ShoeSource stores are closing by the end of may. Parent company Payless Holdings filed for voluntary Chapter 11 bankruptcy on Feb. 18 and announced it is closing all of its 2,300 stores in North America.

Payless currently has nine stores in Suffolk, including one at 1085 Old Country Road in Riverhead, located in the shopping center on the traffic circle.

Liquidation sales will continue until all merchandise, valued at $1 billion, has been sold — anticipated by the end of May, according to liquidation firm Tiger Capital Group.

Payless is the latest in a string of corporate bankruptcies impacting the Route 58 commercial corridor, as brick-and-mortar retail operations are disrupted by Amazon and other online retailers.

The Riverhead Payless ShoeSource store is located next to the still-vacant storefront long occupied by Radio Shack, which filed for bankruptcy and closed its stores in 2015.

Last year, Toys ‘R’ Us and Kmart filed for bankruptcy and closed their doors, following the bankruptcy and closing of Sports Authority in 2016.

Mattress Firm also filed a Chapter 11 bankruptcy petition in October and closed 660 of its 3,300 stores before completing its restructuring and emerging from bankruptcy less than two months later. Its Riverhead location was not among the “underperforming stores” shuttered.

With Riverhead’s main commercial corridor populated by national chains, most of which were developed under the Destination Retail zoning use district adopted pursuant to the 2003 master plan, town officials are looking to revise zoning along Route 58 to address new realities in the retail industry.

Since the master plan was completed in 2003, e-commerce exploded, taking a bigger share of of total U.S. retail sales each year. The e-commerce segment grew from under 4 percent of total retail sales in 2009 to more than 14 percent by the end of 2018, according to the U.S. Department of Commerce. Last year, e-commerce sales represented more than half — 51.9 percent — of all retail sales growth.

In her “State of the Town” speech April 8, Supervisor Laura Jens-Smith called for repurposing empty retail sites on Route 58 for health care, assisted living, data storage and shared work spaces.

“We can repurpose our retail as an economic engine for our future,” Jens-Smith said in her speech last week.

Some sites along Route 58 have already been developed — or redeveloped — for health care users. The former Pizza Hut on the traffic circle is now an urgent care center, a medical office complex has been built on Route 58 east of Northville Turnpike and another complex is under construction just east of Ostrander Avenue.

Despite the disruption of the traditional retail industry by e-commerce, some retailers are bullish enough about brick-and-mortar sales that they continue to open new stores — including locations in Riverhead.

Ashley Furniture is opening in the former Modell’s site in Riverhead Centre.

TJX Companies recently opened Home Sense and Marshalls in the Costco shopping plaza and relocated its Home Goods store there. PetSmart and Ulta Beauty also opened there and another retail storefront is currently under construction in the same plaza.

Land-clearing got underway this week on a 12-acre wooded parcel located on the north side Route 58 west of Osborn Avenue. The town has approved a 60,000-square-foot retail center for the site, which adjoins Riverhead Centre on the west and fronts on Osborn Avenue on the east, just north of the town highway department facility.