DISCOUNT retailer Payless Shoes has been placed in voluntary administration with debts of more than $10 million.

The chain has more than 230 stores nationwide, including about 40 in Victoria, and employs hundreds of staff.

It will continue trading for now, but faces an uncertain future if a buyer cannot be found.

The news comes as it was revealed that Dandenong and Sunshine had overtaken Broadmeadows as Victoria's worst unemployment hot spots.

The jobless rate in Dandenong has risen by a full one percentage point since Christmas to hit 12 per cent - more than double the national rate of 5.1 per cent.

In Sunshine the unemployment level has leapt from 11.1 to 11.9 per cent this year.

But Broadmeadows has finally shaken off the unwanted title of having the state's highest jobless rate. It has bucked the trend with unemployment falling from 13.7 to 11.7 per cent over the past 12 months.

In parts of Melton 10.7 per cent of people are looking for work, while 9.9 per cent are job hunting in southwest Whittlesea.

Other areas of high unemployment include Wyndham west (9.1 per cent), Corio (9 per cent), Morwell (8.6 per cent), Benalla (8.1 per cent) and Maribyrnong (8 per cent).

A report by the federal Department of Workplace Relations for the June quarter, released last night, shows the lowest unemployment rate in the state is 1.8 per cent in Nillumbik south and 2 per cent in the Southbank-Docklands precinct. In Brighton it is 2.6 per cent.

Meanwhile, poor sales at some Payless stores had plagued the business, said Jamieson Louttit, whose insolvency firm was brought in 10 days ago to advise the company after its managing director resigned.

"From a business perspective they can't continue trading if they are underperforming," Mr Louttit said.

An "intensive" campaign to sell the business will begin within weeks.

Reductions in rent are also being urgently sought from store landlords.

Payless Shoes was founded as a family business more than 30 years ago.

Originally published as Payless Shoes faces uncertain future