Shoe chain Payless ShoeSource has filed for U.S. Chapter 11 bankruptcy protection, becoming the latest retailer to succumb to increasing competition from online rivals like Amazon.

The Topeka, Kan.-based retailer said Tuesday it will immediately close nearly 400 stores as part of the reorganization. It has over 4,400 stores in more than 30 countries, including over 100 stores in Canada, and was founded in 1956.

Payless plans to reduce its debt by almost 50 per cent, lower how much it pays in interest and line up funds. The company says some of its lenders have agreed make available up to $385 million to keep the stores running.

"This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify," said Payless CEO Paul Jones in a statement.

Shoppers are increasingly shifting their buying online or going to discount stores like T.J. Maxx to grab deals on designer brands. That shift has hurt traditional retailers, even low-price outlets like Payless.

In fact, Moody's Investors Service said this year that the number of "distressed" retailers — those with cash problems and lots of debt that are facing strong competition — is at the highest rate since 2009. It named Payless as one of those.

Several retailers have closed stores or gone out of business in 2017. The Limited closed all 250 of its remaining stores early this year. It had operated nearly 400 stores at the end of 2000. Teen retailer Wet Seal said in January it would close its 171 stores.