Collective Brands Announces New Franchise Deals for Payless Retail Expansion

Payless Stores to Launch in Mexico, Indonesia, Malaysia, Singapore in 2011

Oct 20, 2010, 14:59 ET from Collective Brands, Inc.

TOPEKA, Kan., Oct. 20 /PRNewswire/ -- As part of its international growth strategy to expand the company's global footprint for all its brands and businesses, Collective Brands, Inc. (NYSE: PSS) announced today that its Payless ShoeSource unit has signed two new franchise deals to bring the Payless retail chain to new international markets beginning next year, including opening Payless stores in Mexico, Indonesia, Malaysia and Singapore.

"We have seen a strong global appetite for our brands and today's announcement of two new franchise partnerships to bring Payless to four new countries next year, including Indonesia, our largest franchise market to date, helps us expand our global footprint to better meet growing international demand," said Matt Rubel, chairman, chief executive officer and president of Collective Brands, Inc.  "The franchise model for Payless is proving to be a strong strategy for us as it accelerates our ability to place stores in new countries and with minimal capital investment. Payless brings the know how in footwear specialty retailing, and our franchise partners bring their strong infrastructure and experience in the local regions.  These new partners are renowned in each market and we are thrilled to be working with them to bring Payless to more shoppers across the globe."

Payless Stores in Mexico

Payless ShoeSource has signed a multi-year franchise deal with Grupo Axo, a new strategic partner headquartered in Mexico City with more than 15 years of experience in the Mexican market, to bring the Payless retail chain to Mexico beginning late next year.  

The two companies said they expect to open 41 stores in the next three years and that they believe the Mexican market can support more than 300 stores in the long term, with a strong potential to nearly double Payless' presence in Latin America, one of its fastest growing international markets.  Additional terms were not disclosed.

"Mexico has a strong and growing economy with more than 100 million people who are interested in fashion and the latest trends, but want it at a great value," said LuAnn Via, CEO of Payless. "That's what Payless is all about. We democratize the latest fashion, design and ideas in footwear and accessory fashion for all to enjoy.  And we are thrilled to partner with Grupo Axo to bring all that Payless has to offer to the people of Mexico."

Grupo Axo employs more than 1,100 associates and operates nearly 100 free-standing and mall stores and over 1,500 shop-in-shops and corners within major department stores.  The company represents Benetton, Brooks Brothers, Brunelo Cucinelli, Coach, Emporio Armani, Etro, Guess, Marc Jacobs, Rapsodia, Thomas Pink and Tommy Hilfiger.

"Mexican customers are going to be surprised by Payless and what it has to offer: a fun, inspiring shopping experience with great brands, high-quality and affordable fashion products," said Alberto Fasja, co-president of Grupo Axo.

With strong determination, Andres Gomez, also co-president of Grupo Axo, added, "This is an important step within our global strategy, which consists of representing, operating and positioning internationally successful brands in our country. Collective Brands also owns the iconic brand, Keds, which has its sneaker product manufactured here in Leon.  With this agreement, we're also promoting local jobs in store sales, construction and local store fixture manufacturing, which will help support the Mexican economy."

Payless Stores in Indonesia

Payless ShoeSource has signed another multi-year franchise deal with MAP ACTIVE, a division of public listed P.T. Mitra Adiperkasa tbk , the largest branded retail marketing company in Indonesia with over 700 stores ranging from Department stores to specialty retail concepts in Sports Fashion and Food & Beverage.  Headquartered in Jakarta , MAP ACTIVE will bring Payless stores to Indonesia, Malaysia and Singapore in a long-term franchise deal that provides potential to exploit the maximum store growth possible.  The two companies announced the opening of  20 stores across the three territories in 2011, followed by an aggressive rollout of stores in 2012 and beyond.  Indonesia -- Southeast Asia's largest economy with more than  240 million shoppers and a rapidly expanding middle class -- is Payless' largest franchise market opportunity to date.

"We are excited to partner with MAP ACTIVE to address the burgeoning Indonesia market with its significant population and its emerging economy.  As well, Malaysia and Singapore have very strong and growing middle class economies, which are a good match for Payless," said Via.  "We know that shoppers in these markets will appreciate our Payless brand promise."

MAP ACTIVE Chief Operating Officer, Michael Capper, said, "Our long term agreement with Payless ShoeSource gives us the confidence to maximize investments and tap the true shopper potential of Indonesia and the surrounding peninsula.  Our partnership is well balanced.  Payless will supply brand expertise and seasonal product collections, while MAP ACTIVE will unlock the market bottleneck to expose Payless to the necessary shopper scale that is so vital in emerging economies."

About Payless & Collective Brands, Inc.

Payless ShoeSource, Inc., a unit of Collective Brands, Inc., is the largest specialty family footwear retailer in the Western Hemisphere and is dedicated to democratizing fashion and design in footwear and accessories and inspiring fun, fashion possibilities for the family at a great value.  As of the end of second quarter 2010, the company operated nearly 4,500 stores.  In addition, customers can buy shoes over the Internet through Payless.com® at www.payless.com.

Collective Brands, Inc. (NYSE: PSS) is a leader in bringing compelling lifestyle, fashion and performance brands for footwear and related accessories to consumers worldwide. The company operates three strategic units covering a powerful brand portfolio, as well as multiple price points and selling channels including retail, wholesale, ecommerce and licensing. Collective Brands, Inc. includes Payless ShoeSource, focused on democratizing fashion and design in footwear and accessories through its nearly 4,500-store retail chain, with its brands Airwalk(R), Dexter(R), Champion(R), Zoe & Zac(TM), the first-ever affordable green footwear brand, and designer collections Lela Rose for Payless, Unforgettable Moments by Lela Rose, Christian Siriano for Payless, Patricia Field for Payless, Isabel Toledo for Payless and STPL x Airwalk, among others; Collective Brands Performance + Lifestyle Group, focused on lifestyle and performance branded footwear and high-quality children's footwear sold primarily through wholesaling, with its brands including Stride Rite(R), Keds(R), Sperry Top-Sider(R), Robeez(R), and Saucony(R), among others; and Collective Licensing International, the brand development, management and global licensing unit, with such youth lifestyle brands as Airwalk(R), Above The Rim(TM), Vision Street Wear(R), STRIKEFORCE(TM), Clinch Gear(TM), Sims(R), Lamar(R) and LTD(R), World Snowboarding Championships(TM) and Hind(R). Information about, and links for shopping on, each of the Collective Brand's units can be found at www.collectivebrands.com.

About Grupo Axo

Grupo Axo, founded in 1993, distributes, operates and promotes internationally renowned brands in the Mexican market. It operates through a retail and wholesale strategy having strong relationship with key players in the industry. Grupo Axo is a strategic player leading the evolution of the retail and fashion industries in Mexico. Grupo Axo will close 2010 with 100+ free-standing and mall stores and over 1,500 shop-in-shops and corners within major department stores. Grupo AXO currently represents Benetton, Brooks Brothers, Brunelo Cucinelli, Coach, Emporio Armani, Etro, Guess, Marc Jacobs, Rapsodia, Thomas Pink and Tommy Hilfiger. www.grupoaxo.com

About Mitra Adiperkasa tbk ( MAP )  

MAP Group is a diversified retail marketing company based in Indonesia and  listed on the Jakarta stock exchange.  MAP corporate strategy is to be the leading anchor tenant of all middle and upper income shopping malls in Southeast Asia's largest economy.  MAP reflects retail diversity in Department stores, Fashion & Lifestyle, as well as Sports & Kids.  Some of its exclusive retail concepts include Sogo & Debenhams Department stores, Zara, Marks & Spencers, TopShop, Samsonite, Swatch, Starbucks Coffee, Burger King and Dominos Pizza.

MAP ACTIVE is a division of MAP specializing in encouraging sports & health for every mind & body in Indonesia via its wholly owned Sports, Kids and AfterSport retail concepts such as Sports Station, Golf House, Planet Sports & Kidz Station .

MAP ACTIVE numbers over 450 free standing stores in Indonesia and aims to double its business volume by 2013.  It is the largest player in Sports, Kids & Health in Southeast Asia.

SOURCE Collective Brands, Inc.



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