MOSCOW and TOPEKA, Kan., Sept. 1 /PRNewswire-FirstCall/ -- Collective Brands Inc. (NYSE: PSS) and its Payless ShoeSource unit announced plans today for additional international expansion for the Payless retail chain. Russia will be the next country in Payless' strategic global growth initiative and through a new agreement with franchisee partner M.H. Alshaya Company, the two companies will franchise Payless stores in the country beginning next year.
Alshaya is currently Payless' franchisee partner in the Middle East region with whom the retailer has successfully opened the market with stores in the United Arab Emirates, Saudi Arabia, Kuwait with stores also planned in other countries in the region including Oman, Bahrain, Qatar, Egypt, Jordan and Lebanon.
Alshaya's Russian subsidiary has been operating as a retail franchisee in Russia for nearly a decade with more than 100 stores representing international brands.
The two companies said they expect to start opening new Payless stores in 2010 and that Russia -- the largest land-mass country in the world with 140 million people with rising household incomes and families attracted to affordable fashion -- appears to be a strong fit for the Payless offering and brand promise. About five stores will open in Russia late next year; Payless and Alshaya said that they expect a minimum of 90 stores in the country in about five years and at least 300 stores in the long term. This is a multi-year transaction; additional terms were not disclosed.
"The franchise model is proving to be the most efficient way to reach more international markets with the Payless brand and all it has to offer -- great fashion, well-recognized brands and quality all at a great price," said Matthew Rubel, chief executive officer and chairman of Collective Brands, Inc. "Payless brings the know how in footwear specialty retailing, and Alshaya brings its strong infrastructure and local experience in Russia. Like many people across the globe, Russian people love to shop and have a strong appetite for fashion and footwear and accessories. Together we are truly excited to bring the Payless brand to Russia and to affordably serve the footwear and accessory needs of families in the country."
Through the franchise arrangement, Payless provides Alshaya with seasonal product assortments, as well as expertise in retail operations, merchandising, marketing and brand strategy. Alshaya provides retail location strategy, construction, logistics, and store training and staffing. Alshaya will utilize Payless' newest store format, referred to as the "Hot Zone" layout, and will purchases Payless product directly from Payless' seasonal assortment.
Like the Payless stores in the U.S., the stores in the Russia will feature a wide assortment of shoes and accessories for the family including branded products for women, men and children covering a range of wearing occasions. Payless is well known as a "House of Brands" retailer with an expanded portfolio of well-recognized brands including designer labels alice + olivia for Payless(TM), Lela Rose for Payless(TM) and the much-anticipated designer line Christian Siriano for Payless(TM), as well as the newest brands to hit Payless stores such as STPLxAirwalk (TM) and Zoe & Zac (TM), the first-ever affordable green shoes that offer "Fresh Green Fashion" for the eco-fashionista.
"Together, Payless and Alshaya have enjoyed great success under the franchise model opening Payless stores in the Middle East, and we are very excited to now introduce Payless to the people of Russia," said Mohammed Alshaya, executive chairman of M.H. Alshaya Company. "We believe the Payless name and all it represents including great brands, a fun inspiring shopping experience and the latest affordable fashions will do well in Russia -- just as it has in other regions of the world. The Russian people are going to be overwhelmed by Payless and what it has to offer."
This newest international expansion effort follows on the heels of Payless' successful launch into the Middle East earlier this year, with Alshaya as its franchisee partner, with four stores in the region including in Saudi Arabia, United Arab Emirates and Kuwait. In 2008, through a joint venture agreement, Payless also successfully entered Colombia with 30 stores now currently in the country.
Payless and its more than 4,500-store chain has an expanding international presence today in countries and territories including the United States, Canada and in Central America, the Caribbean, South America and the Middle East. Stores in Central America, South America, Trinidad and the Dominican Republic are operated through joint ventures. Stores in Canada, Puerto Rico, the U.S. Virgin Islands, Guam and Saipan, are operated through wholly-owned subsidiaries.
Payless believes that the franchise model will enable it to most effectively reach more international markets with its unique global marketplace position in affordable fashion and it's powerful capabilities to deliver on-trend and targeted seasonal branded products. The international franchise strategy is also a significant move in expanding Payless' diversified real estate strategy that includes a well-balanced mix of mall-based stores with free standing stores and those located in lifestyle and local shopping centers.
About Payless ShoeSource
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 first quarter 2008, the company operated more than 4,500 stores. In addition, customers can buy shoes over the Internet through Payless.com(R) at www.payless.com.
About Collective Brands, Inc.
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 more than 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 Abaete for Payless, Lela Rose for Payless, Unforgettable Moments by Lela Rose, alice + olivia for Payless, Christian Siriano for Payless and STLPxAirwalk, among others; Stride Rite, 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), Vision Street Wear(R), Sims(R), Lamar(R) and LTD(R). Information about, and links for shopping on, each of the Collective Brand's units can be found at www.collectivebrands.com.
About M.H. Alshaya Co.
M.H. Alshaya Co. is a leading international franchise operator for over 50 of the world's most recognized retail brands, including Payless ShoeSource, Starbucks(TM), H&M(TM), The Body Shop(TM), Foot Locker(TM), Mothercare(TM), Debenhams(TM), River Island(TM) and Boots(TM). The company operates over 1,700 stores across six divisions: Fashion & Footwear, Health & Beauty, Food, Casual Dining, Optics and Pharmaceuticals.
M.H. Alshaya Co. stores can currently be found in 15 markets across the Middle East and North Africa, Turkey, Cyprus, Russia and Poland. More recently, the company launched operations in Slovakia and Czech Republic. It employs more than 16,000 people from over 35 nationalities. The company has established itself as the industry leader across these territories through a combination of local market understanding and a comprehensive commitment to customer service. Growth in each of its operating divisions and brands is supported by continuous investment in talent and infrastructure. It applies best practices in retail operations, merchandising, marketing, information technology, logistics, real estate, human resources and financial controls.
M.H. Alshaya Co. is the retail business of the Alshaya Group, which was founded in Kuwait in 1890 and today represents one of the most dynamic companies in the Middle East. In addition to its retail operations, the Alshaya Group is active in a number of other sectors including real estate, automotive, hotels, trading and investments. Learn more about the company at www.alshaya.com.
