updated 8/24/2011 8:39:12 PM ET 2011-08-25T00:39:12

The parent company of Payless and Stride Rite shoe stores, Collective Brands Inc., said Wednesday that it plans to close 475 stores and has engaged a firm to help it explore its options.

The company posted a second-quarter loss of $35 million Wednesday, including $83.6 million in one-time charges that mainly reflect the declining value of its stores and of Stride Rite's trade name.

The company's shares soared more than 40 percent in after-hours trading after the announcement.

Its board adopted a short-duration shareholder rights plan, a common tool for fending off unsolicited or hostile offers while such a review is under way. The so-called "poison pill" will kick in if any person or group buys more than 15 percent of Collective Brands' outstanding common stock.

Its largest shareholder is PrimeCap Management Co., with just over 10 percent of outstanding shares, according to FactSet.

The company said its board and executives are conducting "a review of strategic and financial alternatives to further enhance shareholder value" and it hired Perella Weinberg Partners and Kurt Salmon as advisors. The language is typical for companies looking to put themselves up for sale, but the company said it couldn't predict the move's consequences.

Collective Brands plans to close stores with low sales volume in the U.S., Canada and Puerto Rico. More than 300 will be shuttered by the end of the year, including about 275 Payless and 75 Stride Ride children's stores.

The company currently operates 4,844 stores, of which 4,461 are Payless stores. During the second quarter, it opened 18 new stores, closed 20 stores and moved 14 stores.

It expects to record charges of $19 million related to stores closures in the current quarter. Future charges for the closings could add up to $25 million to $35 million.

Collective Brands' loss for the three months that ended July 30 amounted to 58 cents per share. That's compared with a profit of $21.1 million, or 32 cents per share, a year earlier.

Excluding the $83.6 million in charges, the company said it earned $9.9 million, or 16 cents per share. Analysts were expecting adjusted earnings of 21 cents per share, according to FactSet.

Revenue rose 5 percent to $882.4 million, from $841.3 million a year ago and beating analysts' forecast for $872.9 million, according to FactSet.

As of July 30, Collective Brands said, the company had $234.8 million in cash on hand and about $657 million in long-term debt.

After hours, the company's shares settled at $13.70, up $3.42, or 33.3 percent from Wednesday's close. They had ended regular trading at $10.28, up 26 cents, and they have traded between $9.11 and $23.96 the past year.

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