Collective Brands Inc. and its Payless ShoeSource unit announced on Wednesday its plans for international expansion into the Middle East and that it has signed an agreement with M.H. Alshaya Co, the most influential retail franchisee in the region, as its franchisee for the new market expansion initiative. The specialty footwear retailer is on a mission to democratize fashion and design in footwear and accessories to the world. The two companies said they expect to start opening new Payless stores in 2009 in the region including the Saudi Arabia, Kuwait, United Arab Emirates, Bahrain, Qatar, Oman, Egypt, Jordan and Lebanon. This is a multi-year transaction. Additional terms were not disclosed. “The people of the Middle East are young, vibrant and love to shop - frequenting malls and other shopping venues is a significant leisure activity, with customer visits as often as three times a week. Consumers in the Middle East want the latest fashions and women, in particular, enjoy expressing themselves through shoes and accessories,” said Matthew Rubel, chief executive officer and chairman of Collective Brands, Inc. “We see a strong fit with the shoppers of this region and the Payless brand promise. We are thrilled to have such a tremendous franchisee in Alshaya, with its significant retail expertise, infrastructure and deep knowledge of the region. We look forward to bringing shoppers great style, quality and brand names - all at a great price.” Payless and Alshaya said they believe the Middle East could, in the long term, support more than 200 stores. “We are very excited to introduce Payless to the Middle Eastern market, and we believe the Payless name and all it represents including great brands, a fun inspiring shopping experience, the latest affordable fashions and high quality will do well here - just as it has in other regions of the world,” said Mohammed Alshaya, executive chairman of M.H. Alshaya Co. “People in the Middle East are going to be overwhelmed by Payless and what it has to offer.” This newest venture follows on the heels of Payless' successful launch into Colombia, South America, in early August, with four new stores open in Bogota and more than 35 additional stores yet to come in Colombia within the next 18 months. The Middle East market initiative marks a first for the retailer in franchising its stores. The company believes that the franchise model will enable it to most effectively reach more international markets with its unique vision. As well, this strategic move is a significant step 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. Payless and its more than 4,500-store chain has an expanding international presence today with more than 600 stores in 13 countries. __
